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What kind of goods would have a positive cross price elasticity?Cross-Price Elasticity of Demand
Substitute goods have positive cross-price elasticities of demand: if good A is a substitute for good B, like coffee and tea, then a higher price for B will mean a greater quantity of A consumed.
For which pairs of goods is the cross price elasticity most likely to be negative?The pair of items that is most likely to have a negative cross-price elasticity of demand is: ketchup and coffee. margarine and butter. aspirin and hamburgers.
When the cross price elasticity for two goods is positive the goods are?We determine whether goods are complements or substitutes based on cross price elasticity - if the cross price elasticity is positive the goods are substitutes, and if the cross price elasticity are negative the goods are complements.
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