The cross-price elasticity of demand is most likely to be negative between which of the following pairs of goods?
A) Hot dogs and hamburgers
B) Peanut butter and jelly
C) Butter and margarine
D) Milk and pencils

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand is negative for complementary goods, meaning that an increase in the price of one leads to a decrease in the demand for the other. Peanut butter and jelly are complementary goods.

The Cross-Price Elasticity of Demand Is Most Likely to Be