Final answer:
The cross elasticity of demand of -2 between printers and paper indicates that they are complement goods, meaning the demand for one decreases when the price of the other increases.
Step-by-step explanation:
The cross elasticity of demand between printers and paper being -2 indicates that paper and printers are complement goods rather than substitutes. This negative cross-price elasticity of demand means that if the price of one good increases, the quantity demanded for its complement decreases. This happens because the use of these goods is linked; for example, printers require paper to function, so if paper becomes more expensive, people are likely to print less and thereby demand fewer printers.
It is essential to understand that the cross-price elasticity of demand is a measure that helps economists and businesses understand how the price of one good can affect the demand of another. If the cross elasticity of demand is positive, the goods in question are substitutes, leading to an increase in the demand for the substitute good when the price of its counterpart rises. Contrarily, a negative cross elasticity, as in the case of printers and paper, signifies that the goods are complements.