If the cross-price elasticity of demand is -3, then the goods are __________ and the consumers' responsiveness would be characterized as __________.
A)substitutes; inelastic
B)substitutes; elastic
C)substitutes; unit elastic
D)complements; inelastic
E)complements; elastic

Question

Quizplus · Accepted Answer

A negative cross-price elasticity indicates that the goods are complements, and a value of -3 suggests that the demand is elastic, as it is greater than 1 in absolute value.

If the Cross-Price Elasticity of Demand Is -3, Then the Goods