If the amounts of two commodities purchased increase or decrease simultaneously when the price of one changes, then the cross elasticity of demand between them is ________.

one

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negative

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positive

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zero

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Solution

The correct option is A positive
If the amounts of two commodities purchased increase or decrease simultaneously when the price of one changes, then the cross elasticity of demand between them is positive. Cross elasticity of demand refers to the percentage change in demand for a commodity with respect to percentage change in the price of a related good (substitute good or complementary good).

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