Which of the following pairs of goods would most likely exhibit a cross price elasticity of -1.8?
A)orange juice and grapefruit juice
B)coffee and tea
C)a bagel and cream cheese
D)a van and a sport utility vehicle

Question

Which of the following pairs of goods would most likely exhibit a cross price elasticity of -1.8?
A)​orange juice and grapefruit juice
B)​coffee and tea
C)​a bagel and cream cheese
D)​a van and a sport utility vehicle

Quizplus · Accepted Answer

A cross price elasticity of -1.8 indicates that the goods are complements, meaning that an increase in the price of one leads to a decrease in the demand for the other. A bagel and cream cheese are complementary goods, as they are often consumed together.

Which of the Following Pairs of Goods Would Most Likely