If a lower price for good X increases the demand for good Y,the cross elasticity value for the two goods is
A) negative.
B) equal to zero.
C) positive and less than one.
D) positive and greater than one.
E) possibly negative, positive, or zero, but there is not enough information to decide.

Question

Quizplus · Accepted Answer

If a lower price for good X increases the demand for good Y, the goods are complements, and the cross elasticity of demand is negative.

If a Lower Price for Good X Increases the Demand