Yam and palm oil are used together; therefore ____________
A. Yam is a substitute good while palm oil is a complimentary good B. Yam is complimentary good while palm oil is a substitute good C. Yam and palm oil are complimentary goods D. Yam and beans are substitute goods
Correct Answer: C
Explanation
Complimentary goods are goods whose use are jointed i .e. both commodities are used to achieve the same utility jointly. Such goods exhibit a negative cross elasticity of demand.
