If the cross-price elasticity of demand between two goods is negative, then the two goods are ____________
A. unrelated goods B. substitutes C. complements D. normal goods
Correct Answer: C
Explanation
if the cross elasticity of demand is negative it means that as the price of one increases, the quantity of the other decreases. That means the increase in price of one has negative impact on the other. It means the two goods are complementary. One complements the other in demand.
