Question

A negative cross-price elasticity of demand between two products would indicate they are

A negative cross-price elasticity of demand between two products would indicate they are

0 0
Add a comment Improve this question Transcribed image text
Answer #1

A negative cross price elasticity of demand between two products would indicate that they are Complementary goods. As the price of one good increases demand for other good decreases.

Complementary goods are those goods, which are consumed together. eg- Bread and Butter, Pen and Ink etc.

if the price of butter has increased, people will demand less for Bread (because without Butter there will not be any or less consumption of Bread). That's why Complementary goods have negative cross price elasticity of demand.

Add a comment
Know the answer?
Add Answer to:
A negative cross-price elasticity of demand between two products would indicate they are
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT