12) Which of the following statements is true of the cross-price elasticity of demand? A) The cross-price elasticity of demand between complements is zero. B) The cross-price elasticity of demand between substitutes is negative. C) The cross-price elasticity of demand between substitutes is zero. D) The cross-price elasticity of demand between complements is negative.

The correct answer is D) The cross-price elasticity of demand between complements is negative.<br /><br />Cross-price elasticity of demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good. When two goods are complements, they are typically used together, such as hot dogs and hot dog buns. If the price of hot dogs increases, the quantity demanded for hot dog buns is likely to decrease, resulting in a negative cross-price elasticity of demand. This indicates that the two goods are complements.<br /><br />On the other hand, when two goods are substitutes, they can be used as alternatives to each other, such as Coke and Pepsi. If the price of Coke increases, the quantity demanded for Pepsi is likely to increase, resulting in a positive cross-price elasticity of demand. This indicates that the two goods are substitutes.<br /><br />Therefore, the statement that is true of the cross-price elasticity of demand is that it is negative between complements.