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If Tea and Coffee Are Substitutes, the Cross Elasticity of Demand

Question 126

Multiple Choice

If tea and coffee are substitutes, the cross elasticity of demand for coffee with respect to the price of tea will be _______ and an increase in the price of tea will _______ the demand for coffee.


A) negative; decrease
B) negative; increase
C) positive; increase
D) positive; decrease

Correct Answer:

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