PRC-3 · Chapter 11 · Question 6 of 57
If the cross-price elasticity between 'Product X' and 'Product Y' is profoundly negative (-2.8), what does this mean practically for consumers?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Consumers tend to use them together, like printers and ink cartridges
Explanation
A negative cross price elasticity indicates that an increase in the price of X reduces the demand for Y. This happens when goods are complements and consumed together.
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