Q.A rise in the price of petrol reduces the quantity of cars demanded. Petrol and cars are best described as:

A rise in the price of one good REDUCING the quantity demanded of another good is the signature of a negative cross elasticity, which marks complementary goods.

Option (b), Complements, is correct — petrol and cars are used jointly, so a price rise in one reduces demand for the other, giving a negative cross elasticity of demand.

Cross elasticity of demand, $E_c=\dfrac{\%\Delta Q_x}{\%\Delta P_y}$, tells us the relationship between two commodities from its SIGN. Here, X = cars and Y = petrol: a rise in the price of petrol ($\%\Delta P_y > 0$) causes the quantity of cars demanded to FALL ($\%\Delta Q_x < 0$), so $E_c$ is negative.

Option (a) Substitutes would require a POSITIVE cross elasticity (quantity of X rising when price of Y rises) — INCORRECT, since here quantity of cars FALLS.

Option (b) Complements is exactly the case of a negative cross elasticity — two goods used TOGETHER, so that a price rise in one (making the joint use of both costlier) reduces demand for the other. Petrol and cars are a textbook example of complementary goods — CORRECT.

Option (c) Independent goods would require cross elasticity to be ZERO (no response at all) — INCORRECT, since demand for cars clearly did respond.

Option (d) Inferior goods is a classification under INCOME elasticity, not cross elasticity, and describes a single good's own response to a change in income, not a relationship between two different goods — INCORRECT, and the wrong concept entirely for this question.