- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics (1)
- Reading 12. Topics in Demand and Supply Analysis
- Subject 1. Demand Concepts
CFA Practice Question
In the demand function for good x and its complement y, Qx = A + B x Px + C x I + D x Py, we are certain that ______.
A. C < 0
B. B > 0
C. D < 0
Explanation: Cross-price elasticity is negative for complements. Their consumption goes up or down together, as the price of one good goes up, the demand for both falls.
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