If cross-price elasticity between goods A and B is determined to be exactly zero, which of the following statements is correct?
A) Goods A and B are substitutes
B) Goods A and B are complements
C) Goods A and B are comparatives
D) Goods A and B are independent

Question

Quizplus · Accepted Answer

When the cross-price elasticity between two goods is exactly zero, it means that the price change of one good has no effect on the demand for the other good, indicating that the goods are independent of each other.

If Cross-Price Elasticity Between Goods a and B Is Determined