Question

One would expect that the cross price elasticity of ski poles and skis would be

a. positive since they are substitutes.

b. negative since they are substitutes.

c. positive since they are complements.

d. negative since they are complements.

Answer 1

The answer to this question is Letter D.

Price elasticity is the measure between the change of quantity demanded of the products and the change of its price. Price elasticity of demand or PED is always negative and can be inelastic or elastic.