If the cross elasticity of demand is -5 between french fries and orange drink, then french fries
A) and orange drink are complements.
B) and orange drink are substitutes.
C) are a normal good and orange drink is an inferior good.
D) are an inferior good and orange drink is a normal good.

Question

Quizplus · Accepted Answer

Cross elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. A negative cross elasticity of demand indicates that the two goods are substitutes, meaning that an increase in the price of one good will lead to an increase in the demand for the other good.

If the Cross Elasticity of Demand Is -5 Between French