Asked by Rachel Sawyer on Jul 14, 2024
Verified
A positive cross-price elasticity between two goods implies that the two goods are substitutes.
Cross-price Elasticity
A gauge of the reaction in the amount of one product demanded when there's a price change in another product.
Substitutes
Goods or services that can be used in place of each other, where the increase in the price of one leads to an increase in the demand for the other.
- Comprehend the principle of cross-price elasticity of demand and its utilization in identifying the connection between products.
Verified Answer
KF
Karen FanthersJul 21, 2024
Final Answer :
True
Explanation :
A positive cross-price elasticity indicates that as the price of one good increases, the demand for the other good also increases, which is characteristic of substitute goods.
Learning Objectives
- Comprehend the principle of cross-price elasticity of demand and its utilization in identifying the connection between products.
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