Considering the concept of cross-price elasticity, if two goods are complements:
A) an increase in the price of one will cause a decrease in the demand for the other.
B) an increase in the price of one will cause an increase in the demand for the other.
C) a decrease in the price of one will cause a decrease in the demand for the other.
D) a decrease in the price of one has no effect on the demand for the other.

Question

Quizplus · Accepted Answer

When two goods are complements, an increase in the price of one good will lead to a decrease in the demand for the other good, as they are typically used together.

Considering the Concept of Cross-Price Elasticity, If Two Goods Are