Answer to Question #221322 in Microeconomics for Lebogang

Question

If the price of good A falls and the quantity demanded of good B rises,

A. good B is an inferior good.
B. the cross elasticity of demand is positive.
C. the cross elasticity of demand is negative.
D. good A is an inferior good.

Answer 1

C. the cross elasticity of demand is negative

This comes where a price fall is related to the increase in quantity demanded of the substitute product