Cross Price Elasticity and Substitute Goods
If the cross-price elasticity of demand between apples and oranges is 2, which of the following is true?
A
The two goods are complements, and an increase in the price of one good will cause an increase in the quantity demanded of the other.
B
The two goods are independent, and an increase in the price of one good will cause an increase in the quantity demanded of the other.
C
The two goods are substitutes, and an increase in the price of one good will cause an increase in the quantity demanded of the other.
D
The two goods are substitutes, and a decrease in the price of one good will cause an increase in the quantity demanded of the other.
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