When Two Goods Are Complements

question 409

Multiple Choice

When two goods are complements,

• A) the demands for both goods will be elastic.
• B) cross price elasticity of demand will be 0.
• C) cross price elasticity of demand will be negative.
• D) cross price elasticity of demand will be positive.

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Definitions:

Average Cost Formula

A method used in accounting to calculate the cost of goods sold and ending inventory by averaging the cost of goods available for sale.

Perpetual Inventory System

An inventory management system that continuously updates the quantity and value of inventory on hand after each transaction.

Average Cost Formula

A mathematical calculation used to determine the average cost per unit of inventory by dividing the total cost of goods by the total number of units available.