If 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, an increase in the price of one good leads to a decrease in the demand for the other good, resulting in a negative cross price elasticity of demand. The cross price elasticity of demand measures the responsiveness of the quantity demanded of one good to changes in the price of another good.

If Two Goods Are Complements