Question

Which of these pairs of goods is most likely to have a negative cross-price elasticity?

		US Domestic Tuna and Imported Tuna.
		US Domestic Tuna and Bread.
		US Domestic Tuna and Minced Meat.
		US Domestic Tuna and Computer Ink.

Answer 1

Cross price elasticity of demand is the relationship between two type of goods whether they are substitute for complements for each other

Substitutes are those which can replace each other

For example tea and coffee

Complements are those which complete each other

For example bread and butter or pen and paper

Negative cross price elasticity meaning the two good are complements to each other

So from the given options only domestic tuna and bread are complements to each other

Tuna and minced meat can be substitutes but not complements

Tuna and computer are totally unrelated

So the only correct answer here is option B