If the cross elasticity of demand between two goods is negative, are the goods substitutes or complements?

What will be an ideal response?


If the cross elasticity of demand is negative, then the goods are complements.

Economics

You might also like to view...

The more substitutes available for a product, the

A) larger is its price elasticity of demand. B) smaller is its income elasticity of demand. C) smaller is its price elasticity of demand. D) larger is its income elasticity of demand.

Economics

In the United States, the money supply (M1) is comprised of:

A. coins, paper currency, and checkable deposits. B. currency, checkable deposits, and Series E bonds. C. coins, paper currency, checkable deposits, and credit balances with brokers. D. paper currency, coins, gold certificates, and time deposits.

Economics

As we move up along a linear demand curve, the price elasticity of demand becomes more:

A. variable. B. log-linear. C. elastic. D. inelastic.

Economics

Trading French wine for California wine is an example of intraindustry trade

Indicate whether the statement is true or false

Economics