1. The problem asks for the interpretation of a positive price elasticity of demand (PED). 2. Price elasticity of demand (PED) measures how much the quantity demanded of a good responds to a change in its price. 3. Mathematically, PED is defined as: $$\text{PED} = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}$$ 4. If PED is positive, it means that when the price increases, the quantity demanded also increases, or when the price decreases, the quantity demanded decreases. 5. This is unusual for most goods because typically, demand decreases as price increases (negative PED). 6. A positive PED indicates that the good is a **Veblen good** or a **Giffen good**: - **Veblen goods** are luxury items where higher prices make the good more desirable as a status symbol. - **Giffen goods** are inferior goods where a price increase leads to higher demand due to the income effect outweighing the substitution effect. 7. Therefore, a positive PED means the good behaves contrary to the law of demand, and demand increases with price. Final interpretation: **A positive PED means the good is a Veblen or Giffen good, where demand increases as price increases.**