In the above figure, if the two goods, A and B, are complements, which of the following is true?
Select ONE answer:
- The cross elasticity of demand between them is positive.
- The shift from S0 to S1 for good A lead to the shift from D0 to D1 for good B.
- The shift from D0 to D1 for good B lead to a shift from S0 to S1 for good A.
- The law of demand is at work in both markets.
Show your workings to arrive at your answer, and explain and justify your reasons:
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This is multiple choice question is suitable for Economics KS5 classes.
The answer is 2
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