If the cross-price elasticity of demand is −3,then _____
A)the goods are substitutes.
B)the goods are unrelated.
C)one of the two goods is an inferior good.
D)one of the two goods is a luxury.
E)the goods are complements.

Question

Quizplus · Accepted Answer

A negative cross-price elasticity of demand indicates that the goods are complements, meaning that an increase in the price of one good leads to a decrease in the demand for the other good.

If the Cross-Price Elasticity of Demand Is −3,then _____