The cross-elasticity of demand for good S with respect to the price of good P is +1.5. The cross-elasticity of demand for good S with respect to the price of good R is –1.5. The cross-elasticity of demand for good P with respect to the price of good R is –1.5. What conclusion can be drawn about goods P, R and S?
- AS and P are complements; P and R are substitutes.
- BS and P are complements; R is an inferior good.
- CS and P are substitutes; P and R are complements.
- DS and P are substitutes; R is an inferior good.