Practice prompt · Q:economics-and-market-foundations/classify-substitute-good-001

Qualify a substitute relationship

Requires positive cross price direction plus market, use, segment, period, and evidence boundaries.

Updated Aug 7, 2026 Review due Nov 7, 2026

Practice

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A supplied packet reports positive cross-price elasticity for coffee quantity with respect to tea price. Which conclusion is reviewable?

Choose the best answer. a The positive coffee-quantity response to tea price supports coffee as a substitute for tea for this segment, use, range, and period; reverse direction, causation, market definition, market power, and forecasts require more evidence. b Coffee and tea are always symmetric substitutes because they are both beverages. c The coefficient proves a legal product market and seller market power.

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Answer: a

Choice a. Treat substitution as a directional, scoped relationship and stop before legal, causal, or forecasting claims.