PRC-3 · Chapter 11 · Question 33 of 57
If the price of printers falls by 20%, the demand for printer ink cartridges rises by 40%. The Cross Elasticity of Demand is -2.0. This negative relationship proves the goods are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Complements
Explanation
A negative cross elasticity indicates that the goods are consumed together (complements); a drop in the price of one increases the demand for the other.
More Elasticity of Demand and Supply MCQs
- Q35Which of the following scenarios would result in a product having a highly elastic demand?
- Q36Why is the price elasticity of supply (PES) usually much higher in the long run than in the short run?
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- Q39When a firm lowers the price of its product, it experiences a massive surge in quantity demanded that completely overwhelms the price cut…