7 : cross price elasticity of demand (not fin) Flashcards
1
Q
what is cross elasticity of demand (XED) ?
A
responsiveness of quantity demanded for good A following a change in the price of good B (a related good)
2
Q
what is the formula for XED ?
A
. % change in qty D of product A
XED = ————————————————–
% change in price of product B
3
Q
A
