Javanese7296 Javanese7296
  • 10-01-2020
  • Business
contestada

The cross price elasticity for coffee for a change in the price of tea is likely to be __________.

Respuesta :

Dryomys Dryomys
  • 10-01-2020

Answer:

Positive

Explanation:

Coffee and tea are substitute goods. Therefore, the cross price elasticity of substitute goods is positive.

Positive cross price elasticity states that there is a direct relationship between the price of one good and the demand for its substitute good.

If there is an increase in the price of the coffee then as a result the demand for tea increases though the price of tea remains the same.

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