When two goods are complements,
A) the demands for both goods will be elastic.
B) cross price elasticity of demand will be 0.
C) cross price elasticity of demand will be negative.
D) cross price elasticity of demand will be positive.

Question

Quizplus · Accepted Answer

When two goods are complements, they are consumed together. If the price of one of these goods rises, the demand for both goods will decrease, and if the price falls, the demand will increase. This means that the cross price elasticity of demand will be negative.

When Two Goods Are Complements