When two goods are complements, their cross-price elasticity of demand is:
A) positive.
B) negative.
C) zero.
D) equal to one.

Question

Quizplus · Accepted Answer

When two goods are complements, their cross-price elasticity of demand is negative. This means that when the price of one good increases, the demand for the other good decreases. Conversely, when the price of one good decreases, the demand for the other good increases.

When Two Goods Are Complements, Their Cross-Price Elasticity of Demand