The correct answer is A: An increase in the price of C will decrease the demand for complementary product D.
The concept of cross elasticity of demand describes how the demand for one good changes when the price of another good is changed.
The cross elasticity of demand for complementary goods is negative. This means that as the price a particular good is increased, another good which is complementary to it and necessary for its consumption decreases accordingly.
For instance, when the price of tea increases, the demand for milk (a complementary good) decreases.
