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Explain what is meant by cross price elasticity of demand.

      

Explain what is meant by cross price elasticity of demand.

  

Answers


Lydia
Cross price elasticity of demand (XED) measures how responsive the quantity demanded of one good is to a change in the price of another good.
It is measured by the equation:
% change in the quantity demanded of good a / % change in price of good b
A positive figure for XED indicates that the goods are substitutes, whereas a negative value indicates that the goods are complementary
lydiajane74 answered the question on July 4, 2018 at 09:28


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