If the cross price elasticity of demand between two goods is positive, what can we infer about the relationship between these goods? Additionally, how would this relationship be graphically represented in terms of demand curves?

If the cross price elasticity of demand between two goods is positive, it means that when the price of one good increases, the demand for the other good also increases. This typically indicates that the two goods are substitutes, meaning that consumers can replace one with the other. For example, if the price of coffee goes up, more people might choose to buy tea instead, leading to an increase in tea's demand. Graphically, this relationship can be shown with demand curves, where the demand curve for the substitute good shifts to the right as its price increases, reflecting higher demand. In contrast, if the cross price elasticity were negative, it would suggest that the goods are complements, meaning they are often used together.