What does a positive cross-price elasticity of supply indicate?

Economics Supply And Demand Questions



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What does a positive cross-price elasticity of supply indicate?

A positive cross-price elasticity of supply indicates that the quantity supplied of a particular good or service increases when the price of a related good or service increases. In other words, the two goods are substitutes in production, and an increase in the price of one good leads to an increase in the supply of the other good.