Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand?
A) purses and backpacks
B) sofas and dining room tables
C) manicures and pedicures
D) shoes and socks
E) trucks and sedans

Question

Quizplus · Accepted Answer

Negative cross-price elasticity of demand indicates that the two goods are complements, meaning that an increase in the price of one leads to a decrease in the demand for the other. Shoes and socks are typically used together, so if the price of shoes goes up, people might buy fewer socks as well, indicating they are complements.

Which One of the Following Pairs of Goods Is Likely