If the cross elasticity of demand for DVD players and DVDs equals -2, then the products are
A) complements.
B) normal goods.
C) unrelated.
D) substitutes.
E) inferior goods.

Question

Quizplus · Accepted Answer

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

If the Cross Elasticity of Demand for DVD Players and DVDs