if the coefficient of cross elasticity of demand for goods Y and Z is positive, the two goods are?
Answer Details
If the coefficient of cross elasticity of demand for goods Y and Z is positive, this indicates that the two goods are substitutes. This means that if the price of good Y increases, the demand for good Z will increase as consumers switch from good Y to good Z, and vice versa. For example, if the price of coffee (good Y) increases, some consumers may switch to tea (good Z) instead, causing an increase in the demand for tea. Conversely, if the price of tea increases, some consumers may switch to coffee instead, causing an increase in the demand for coffee. Therefore, the two goods are substitutes.