What is Cross-Elasticity of Demand?

Somtochukwu

Cross elasticity of demand refers to the degree of responsiveness of demand for a commodity to changes in the price of another commodity.

That is, it measures how changes in the price of a commodity will affect the demand of another commodity. Cross elasticity of demand applies mainly to goods that have close substitutes as well as complementary goods.

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Somtochukwu

Visionary Leader and Development Economist in Nigeria. CEO at Bufiredd Economic Consults Ltd
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