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An economist estimated the cross price elasticity for peanut butter and bananas to be-1.5. Based on this information, we know
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Answer #1

The correct answer is 'Option A'.

The cross-price elasticity of demand of peanut butter and bananas is given as -1.5. It can be said that the two goods are complements of each other because of negative cross-price elasticity of demand because an increase in price of one good will also reduce the quantity demanded of the good that is closely related to it and necessary for its consumption.

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