The cross-price elasticity of demand of complementary goods is:
A)less than 0.
B)equal to 0.
C)greater than 0.
D)between 0 and 1.

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand of complementary goods is negative because an increase in the price of one complementary good would lead to a decrease in the demand for the other complementary good. As a result, the cross-price elasticity of demand of complementary goods is always less than 0.

The Cross-Price Elasticity of Demand of Complementary Goods Is