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If goods A and B are complements, an increase in the price of A will result...

If goods A and B are complements, an increase in the price of A will result in

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Expert Solution

When the cross-price elasticity demand sign is negative, then both goods will be complementary goods

The price of complement goods and demand for its complement goods are negatively related.

When the price of good X falls this causes the demand for good Y to increase. Hence it can be concluded that good X and Y are complements.

Hence if goods A and B are complements, an increase in the price of A will result in decrease in the quantit demand for good B.

Rahul Sunny answered 2 years ago
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