11.9k views
1 vote
If the cross elasticity of demand between car insurance and new cars is

minus−​0.41,
then car insurance and new cars are

1 Answer

4 votes

Final answer:

The cross elasticity of demand between car insurance and new cars being -0.41 indicates that the two goods are complementary.

Step-by-step explanation:

The cross elasticity of demand between car insurance and new cars being -0.41 indicates that the two goods are complementary. This means that they are consumed together or have a negative relationship in terms of demand. When the price of new cars decreases, the demand for car insurance is expected to increase, and vice versa.

User Zachary Dahan
by
8.3k points