Asked by Ahmed Aldughaither on Jul 12, 2024

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​For substitutes,cross price elasticity of demand is:

A) ​Negative
B) Positive
C) between zero and one only
D) ​zero. 

Cross Price Elasticity

A measure of how the demand for one product changes in response to a change in the price of another product, indicating substitutes or complements.

Substitutes

Goods or services that can replace each other in use, affecting demand when their prices or other attributes change.

Demand

The quantity of a product or service consumers are willing and able to purchase at various prices.

  • Determine the function of cross-price elasticity in identifying the interrelation between products.
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SK
Simar KandholaJul 14, 2024
Final Answer :
B
Explanation :
Cross price elasticity of demand measures the responsiveness of demand for one good to a change in the price of another good. For substitutes, an increase in price of one good will lead to an increase in demand for the other good, making the cross price elasticity of demand positive.