A&P II Lymphatic System Practice Exam

If the cross-price elasticity of demand between Good X and Good Y is -1.5, what can be concluded about the two goods?

They are strong substitutes They are strong complements Good X is a luxury and Good Y is a necessity They are unrelated goods

Correct Answer:

They are strong complements

Explanation:

A negative cross-price elasticity of demand indicates that the goods are complements. A value of -1.5 suggests a relatively strong complementary relationship.

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