Question

a positive cross elasticity o demand coefficient indicate a product is what?

Answer 1

Answer:

A positive cross-price elasticity value indicates that the two goods are substitutes. For substitute goods, as the price of one good rises, the demand for the substitute good increases. ... Conversely, the demand for a substitute good falls when the price of another good is decreased.

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Answer 2

A positive cross elasticity of demand coefficient indicate that the particular product in concern is a Substitute.

Explanation:

A positive cross price elasticity of demand implies that if the price of a particular increases or goes up the demand for the other product will also increase consequently.It means that as a product becomes more expensive,the consumers would shift their preference towards a substitute product thereby increasing its demand.Examples of substitute products can be Coke and Pepsi or Limca and 7 up, ,the products that exhibit some similarity in nature or quality.Hence,cross price elasticity measures the change in demand for a particular product relative to the change in price of another product.