Which of the following statements is true of the cross-price elasticity of demand?
A) The cross-price elasticity of demand between substitutes is zero.
B) The cross-price elasticity of demand between complements is zero.
C) The cross-price elasticity of demand between substitutes is negative.
D) The cross-price elasticity of demand between complements is negative.

Question

Quizplus · Accepted Answer

The cross-price elasticity of demand measures how the quantity demanded of one good responds to a change in the price of another good. For complements, the cross-price elasticity of demand is negative, indicating that an increase in the price of one good leads to a decrease in the demand for its complement.

Which of the Following Statements Is True of the Cross-Price