Purchase mobileappIcon Download our Mobile App
Call Us at 011-40705070   or  
Click to Call
Select your Board & Class
  • Select Board
  • Select Class

What is cross elasticity of demand ? Explain it with examples?

Asked by Deep Ludhiyani(student) , on 30/11/13


it measures the change in demand for main commodity due to change in prices of substitute or complementary commodity

Posted by Neha Agarwal(student)on 1/12/13


The cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good. It is measured as the percentage change demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are fuel inefficient decreased by 20%, the cross elasticity of demand would be: frac{-20 %}{10 %}=-2

Posted by Juhi Grover(MeritNation Expert)on 2/12/13

This conversation is already closed by Expert

Ask a QuestionHave a doubt? Ask our expert and get quick answers.
Show me more questions