Question

If the cross elasticity of demand between car insurance and new cars is

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

Answer 1

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.