Cross-Price Elasticity of Demand

Cross-price Elasticity of Demand helps us identify substitutes and complements.

Concept: Cross-Price Elasticity of Demand


Problem: An increase in the demand for chicken, from 8,000 to 12,000, was caused by an increase in the price of beef from $4.50 to $5.50. Therefore, the cross-price elasticity for these two products is:


Problem: The cross-price elasticity of demand between apples and oranges is defined as