Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsDemand1 Mark
Question
What is cross elasticity of demand?
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Answer
When the demand of the concerned commodity changes in response to the change in price of its related good either substitute or complementary good), then the extent of such change in demand is called cross elasticity or cross-price elasticity of demand. The cross-price elasticity may be a positive value or negative value, depending on whether the goods are complementary or substitutes.
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