If the cross elasticity of demand between goods A and B is negative
A) the demands for A and B are both price elastic.
B) the demands for A and B are both price inelastic.
C) A and B are complements.
D) A and B are substitutes.

Question

Quizplus · Accepted Answer

A negative cross elasticity of demand indicates that as the price of one good increases, the demand for the other good decreases, which is characteristic of complementary goods.

If the Cross Elasticity of Demand Between Goods a and B