If automobiles and gasoline are complements, then their cross-elasticity coefficient will be:
A) strictly greater than one.
B) positive.
C) equal to zero.
D) negative.

Question

Quizplus · Accepted Answer

When two goods are complements, the cross-elasticity of demand is negative, indicating that an increase in the price of one good leads to a decrease in the demand for the other.

If Automobiles and Gasoline Are Complements, Then Their Cross-Elasticity Coefficient