What does a negative cross-price elasticity of supply indicate?

Economics Supply And Demand Questions



80 Short 55 Medium 47 Long Answer Questions Question Index

What does a negative cross-price elasticity of supply indicate?

A negative cross-price elasticity of supply indicates that the quantity supplied of a good decreases when the price of another related good increases. In other words, the two goods are complements in production, meaning that they are typically produced together and the supply of one is dependent on the price of the other.