When two goods are complements,we expect their cross-price elasticity of demand to:
A)be positive.
B)be negative.
C)be zero.
D)equal 1.

Question

Quizplus · Accepted Answer

When two goods are complements, they are typically consumed together. As the price of one good increases, the demand for the complementary good decreases. This means that the cross-price elasticity of demand is negative. Therefore, the correct answer is B.

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