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Are two goods complements if the cross-elasticity coefficient is negative?

Anonymous

∙ 11y ago

Updated: 11/4/2022

Cross Elasticity Coefficient is defined as when the price of a particular commodity rises how is the demand of another commodity changing. If the goods are complements like say for example petrol and petrol driven cars, if there is a price hike in petrol then demand for petrol cars would fall. Hence a negative cross elasticity of coefficient. On the other hand the demand for deisel cars would rise (given the deisel prices are constant) because they serve as substitutes, and will have a positive cross elasticity.

Wiki User

∙ 11y ago

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Q: Are two goods complements if the cross-elasticity coefficient is negative?

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Continue Learning about Economics

What are goods complements?

canoe and paddles

How do complements affect demand?

Because of complimentary goods demand increase.

If two goods are complements?

I thought the question would fit for Government. Not math.

What is it called if two goods are complements?

A decrease in the price of one will increase the demand for the other.

Which type of goods is most adversely affected by recessions?

Goods for which the income-elasticity coefficient is relatively high and positive

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Related Questions

What are goods complements?

canoe and paddles

How do complements affect demand?

Because of complimentary goods demand increase.

If two goods are complements?

I thought the question would fit for Government. Not math.

What is it called if two goods are complements?

A decrease in the price of one will increase the demand for the other.

Which type of goods is most adversely affected by recessions?

Goods for which the income-elasticity coefficient is relatively high and positive

If two goods are complements their cross elasticity of demand will normally be?

No! That's why I came here! B======D --- --- --- --- (=^_^=)

How price of related goods affect demand?

Price of related goods fall into two categories: substitutes and complements. Complements are when a price decrease in one good increases the demand of another good. Substitutes are when a price decrease in one good decreases the demand for another good.

Can we use the concept of price elasticity to identify a brand's competitors?

Yes, you can. When the cross-price elasticity between two goods is positive, they are more likely substitutes in consumption; when it is negative, they are more likely complements. A cross-price elasticity of 0 implies no correlation.

Two goods that are used together are called?

Complementary goods. These goods are typically consumed or used together, as the use of one good complements the use of the other. Examples include peanut butter and jelly, and computers and software.

When two goods are complements, how does a change in the price of one affect the demand for the other?

When two goods are complements, a decrease in the price of one good will typically increase the demand for the other good. Conversely, an increase in the price of one good will usually decrease the demand for the other good. This is because the two goods are often consumed together, so a change in the price of one affects the demand for the other.

What are demand shifters?

Prices of Related Goods (Substitutes and Complements) Changes in Income Preferences (Taste) Expectations Population (Number of Buyers)

Suppose the demand for good x is lnqxd 21 - 0.8 lnpx - 1.6 lnpy 6.2 lnm 0.4 lnax then you know goods x and y are A. Substitutes B. Complements C. Normal goods D. Inferior goods?

The famous sports goods are made in the city of

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