If two goods have a cross elasticity of demand of -2,then when the price of one good increases,the demand curve of the other good
A) shifts rightward.
B) shifts leftward.
C) remains unchanged and the supply curve also remains unchanged.
D) might shift rightward, leftward, or remain unchanged.
E) remains unchanged but the supply curve shifts leftward.

Question

Quizplus · Accepted Answer

The negative sign of the cross elasticity of demand suggests that the two goods are complements, meaning they are consumed together. When the price of one good increases, the demand for the other good will decrease, shifting the demand curve leftward.

If Two Goods Have a Cross Elasticity of Demand of -2,then