A negative value for the cross elasticity of demand between two goods indicates that
A) the goods are substitutes.
B) the goods are complements.
C) one of the goods is normal and the other is inferior.
D) each good is price inelastic.

Question

Quizplus · Accepted Answer

The cross elasticity of demand measures the responsiveness of the quantity demanded for one good to a change in the price of another good. A negative value indicates that as the price of one good increases, the demand for the other good decreases, which is characteristic of complementary goods.

A Negative Value for the Cross Elasticity of Demand Between