If the cross-price elasticity of demand between two goods is negative,then
A)the two goods are complements
B)the two goods are substitutes
C)as price of one good rises,the quantity demanded of the other good also rises
D)one of the goods must be inferior
E)the two goods are rarely used together by consumers

Question

Quizplus · Accepted Answer

A negative cross-price elasticity of demand indicates that as the price of one good increases, the demand for the other good decreases. This is characteristic of complementary goods, which are used together. For example, if the price of peanut butter increases, the demand for jelly might decrease, as fewer people will be buying peanut butter to spread on their toast with jelly.

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