If coffee and tea are substitutes, what is the cross-price elasticity of demand for coffee with respect to the price of tea?

It is greater than 1
It is negative
It is a positive
They are both inferior goods

The correct answer is B. It is negative.

Substitute goods are goods that can be used in place of each other. For example, coffee and tea are substitutes. If the price of coffee increases, people will demand less coffee and more tea. This is because tea is a substitute for coffee. The cross-price elasticity of demand for coffee with respect to the price of tea is negative. This means that when the price of tea increases, the demand for coffee will decrease.

Option A is incorrect because the cross-price elasticity of demand for coffee with respect to the price of tea is not greater than 1. Option C is incorrect because the cross-price elasticity of demand for coffee with respect to the price of tea is not positive. Option D is incorrect because coffee and tea are not both inferior goods.