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Aparna
Aparna

Aparna

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Asked: September 30, 20212021-09-30T16:49:53+05:30 2021-09-30T16:49:53+05:30In: Economics

What is Cross Elasticity of demand?

What is Cross Elasticity of demand?

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      [Deleted User]
      2021-09-30T16:54:03+05:30Added an answer on September 30, 2021 at 4:54 pm

      Cross Elasticity of demand

      • The measure of responsiveness of the demand for a good towards the change in the price of a related good is called cross price elasticity of demand. It is always measured in percentage terms.
      • With the consumption behavior being related, the change in the price of a related good leads to a change in the demand of another good. Related goods are of two kinds, i.e. substitutes and complementary goods. In case the two goods are not related, the Coefficient of Cross Elasticity is zero.
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