Would you expect cross-price elasticity between the following pairs of products to be positive, negative, or zero? A

A. Television sets and DVRs - the cross price elasticity will be negative. TV sets and DVRs are complimentary goods. Which means that when an individual buys one, they may often buy the other to go with the similar good. When price increases for one good, the demand decreases and therefore the demand for the compliment also decreases.

B. Rye bread and whole wheat bread - the cross price elasticity will be positive. Rye and wheat bread are substitutes. This means that one product can easily be substituted for the other. I.e, hotdogs and hamburgers. When the price of rye bread increases, the quantity demand for whole wheat bread increases because rye bread is now more expensive.

C. Construction of residential housing and furniture - These two goods will have negative cross price elasticity because again they are complimentary goods. When one buys a new home, they often buy furniture and thus the two will often be purchased together and have similar cross price elasticity to example A.

D. Breakfast cereal and men's shirts - these two goods will have a cross price elasticity of zero because they are not related in anyway.