Question

if the cross - price elasticity between two goods is negative, the two goods are likely to be
a. substitutes.
b. luxuries.
c. necessities.
d. complements.

Explanation:

Cross-price elasticity measures how the demand for one good changes when the price of another good changes. A negative value means that when the price of one good rises, the demand for the other good falls, which is the relationship between complementary goods (goods used together, like coffee and sugar). Substitutes have positive cross-price elasticity, while luxuries and necessities are categorized by income elasticity, not cross-price elasticity.

Answer:

d. complements.