XED and YED Flashcards
1
Q
What is the formula for XED?
A
% change in quantity demanded for product A /// % change in price of product B
2
Q
What is the cross price elasticity of demand (XED) ?
A
Cross price elasticity of demand measures the responsiveness of demand for one good to changes in the price of another good
3
Q
What does it mean if XED is positive?
A
Substitute goods
4
Q
What does it mean if XED is negative?
A
Complement goods
5
Q
What does it mean if XED is equal to zero?
A
Unrelated goods
