Glossary · Micro · Elasticity

Cross-price elasticity of demand (XED)

How demand for one good responds to a change in the price of another, measured as the percentage change in quantity of good X divided by the percentage change in the price of good Y. Positive means the goods are substitutes, negative means complements, zero means unrelated.

Also called: XED, cross elasticity

Taught in: Cross-Price Elasticity — Substitutes & Complements

Related terms

Substitutes Complements

More from elasticity

Determinants of PED Determinants of PES Elastic demand Income elasticity of demand (YED)Inelastic demand Luxury good Midpoint formula Perfectly elastic demand

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