If the cross elasticity of demand for DVD players and DVDs equals -2,then the products are
A) unrelated.
B) complements.
C) inferior goods.
D) substitutes.
E) normal goods.

Question

Quizplus · Accepted Answer

The negative cross elasticity of demand indicates that as the price of one good (DVD players) increases, the demand for the other good (DVDs) decreases, which is characteristic of complementary goods.

If the Cross Elasticity of Demand for DVD Players and DVDs