If two goods are complementary,we can assume that the cross-price elasticity of demand for these goods is:
A)greater than 1 .
B)equal to 0.
C)less than 0.
D)impossible to determine without more information.

Question

Quizplus · Accepted Answer

Complementary goods are those goods which are used together, such as peanut butter and jelly. If the price of peanut butter rises, the demand for jelly will decrease as people will be less likely to purchase jelly without peanut butter. Thus, the cross-price elasticity of demand for complementary goods is negative.

If Two Goods Are Complementary,we Can Assume That the Cross-Price