If the cross-price elasticity between goods A and B is negative,we know the goods are:
A) inferior goods.
B) complements.
C) inelastic.
D) substitutes.

Question

Quizplus · Accepted Answer

When the cross-price elasticity between goods A and B is negative, it indicates that the two goods are complements. This is because when the price of one good (say, A) increases, the demand for the other good (B) decreases, since they are used together - hence the negative sign.

If the Cross-Price Elasticity Between Goods a and B Is