If the cross price elasticity of demand between two goods is positive, they are referred to as what goods?

Economics Jan 22, 2021

Expert Solution

If the cross-price elasticity of demand is positive, the goods are substitutes. Substitutes are goods that consumers buy one of instead of the other, but not both. If the price of the substitute increase (price of good B), fewer units of the substitute are sold. Because this is a substitute, the demand for your good (quantity of good A) increases.

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