If two goods are complements,their cross-price elasticity of demand is:
A)less than 0.
B)equal to 0.
C)positive but almost equal to 0.
D)greater than 0.

Question

Quizplus · Accepted Answer

Cross-price elasticity of demand measures the responsiveness of demand for one good to a change in the price of another good. Complementary goods have a negative cross-price elasticity of demand, meaning that as the price of one good increases, the demand for the other good will decrease. Therefore, the cross-price elasticity of demand is less than 0.

If Two Goods Are Complements,their Cross-Price Elasticity of Demand Is