Complements: Two goods that complement each other have a negative cross elasticity of demand: as the price of good Y rises, the demand for good X falls. A positive cross-price elasticity value indicates that the two goods are substitutes.
Beside this, what does it mean when the price elasticity of demand is negative?
Price elasticity is usually negative, as shown in the above example. That means that it follows the law of demand; as price increases quantity demanded decreases. As gas price goes up, the quantity of gas demanded will go down. Price elasticity that is positive is uncommon.
Can you have a negative PED?
Price elasticity of demand is usually negative. As there is a negative relationship between quantity demanded and price, quantity demanded decreases when price increases. But I disagree with their response that it is always negative.
What is negative cross elasticity of demand?
The cross-price elasticity may be a positive or negative value, depending on whether the goods are complements or substitutes. If two products are complements, an increase in demand for one is accompanied by an increase in the quantity demanded of the other.