If pizza and beer are complementary goods, we can conclude that
A) the income elasticity of demand is negative.
B) their cross- elasticity of demand is negative.
C) the income elasticity of demand is positive.
D) both goods are inferior goods.
E) their cross- elasticity of demand is positive.

Question

Quizplus · Accepted Answer

Complementary goods have a negative cross-elasticity of demand because an increase in the price of one leads to a decrease in the demand for the other.

If Pizza and Beer Are Complementary Goods, We Can Conclude