Suppose That a 20 Percent Increase in the Price of Normal

question 195

Multiple Choice

Suppose that a 20 percent increase in the price of normal good Y causes a 10 percent decrease in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is

• A)negative, and therefore these goods are substitutes.
• B)negative, and therefore these goods are complements.
• C)positive, and therefore these goods are substitutes.
• D)positive, and therefore these goods are complements.