If the cross elasticity of demand between goods x and y is positive, this implies that they are b) substitute goods.
Cross elasticity of demand measures the responsiveness of the quantity demanded for one good when the price of another good changes. When the cross elasticity is positive, it indicates that an increase in the price of good x leads to an increase in the quantity demanded of good y. This relationship is characteristic of substitute goods, which are products that can replace each other in consumption. For example, if the price of tea rises, consumers might buy more coffee as a substitute.
In contrast, complementary goods would show a negative cross elasticity of demand, as an increase in the price of one good typically leads to a decrease in the quantity demanded of its complement. Thus, the positive nature of the cross elasticity in this case clearly indicates that goods x and y are substitutes.