If the cross-price elasticity of demand between two goods is -2.2,then the
A)two goods are substitutes
B)two goods are complements
C)income elasticity of demand must be between 0 and 1.0
D)goods are both normal goods
E)goods are both inferior goods

Question

Quizplus · Accepted Answer

A negative cross-price elasticity of demand indicates that the two goods are complements, meaning that an increase in the price of one good leads to a decrease in the demand for the other good.

If the Cross-Price Elasticity of Demand Between Two Goods Is