Coffee and cream:
A) are both luxury goods.
B) are complements.
C) are both more inelastic in demand in the long run than in the short run.
D) have a positive cross price elasticity of demand.

Question

Quizplus · Accepted Answer

Coffee and cream are complements because they are often consumed together. If the price of one increases, the demand for the other may decrease as people are less likely to purchase the more expensive complement. For example, if the price of cream increases, people may start using less cream in their coffee or switch to a cheaper alternative.

Coffee and Cream