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JAMB Economics 1991 Question 15

Question 15

Elasticity

The cross-elasticity of demand between complementary goods is

  1. A.unitary
  2. B.positive
  3. C.zero
  4. D.negative
Show the answer and explanation

Answer: D (negative)

Explanation

For complements a rise in the price of one reduces demand for the other, so the cross-elasticity has a negative sign.