Suppose that the cross
Concept Introduction:
Cross Price Elasticity of demand: It refers to the degree of responsiveness to change in the quantity demanded of one product due to change in the price of another product. It can be calculated as follows:
The goods will be substitute goods, if the cross price elasticity is positive, because any increase in the price of good "y", will increase the quantity demanded of good "x".
The goods will be complemented goods, if the cross price elasticity is negative, because any increase in the price of good "y", will decrease the quantity demanded of good "x".
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