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If the cross elasticity of demand for pasta with respect to the price of a pizzai s positive, then pasta and pizza are ______.

a. complements
b. substitutes

1 Answer

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Final answer:

If the cross elasticity of demand for pasta with respect to the price of pizza is positive, it means that pasta and pizza are substitutes.

Step-by-step explanation:

The cross elasticity of demand measures how the quantity demanded of one good responds to changes in the price of another good. If the cross elasticity of demand for pasta with respect to the price of pizza is positive, it means that an increase in the price of pizza will lead to a greater quantity demanded of pasta. Therefore, pasta and pizza are substitutes.

answered
User Charleso
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