3.4)Price, Income & Cross Elasticity of Demand Flashcards
(4 cards)
1
Q
Define “Cross Elasticity of Demand”
A
The measure of how the quantity of one good responds to a change in price of another good
2
Q
What does XED equal
A
% change in demand of good A/ % change in price of good B
3
Q
Define “Complements”
A
Goods/Services in joint demand with a negative XED
4
Q
Define “Substitutes”
A
Goods/Services in competitive demand. With a positive XED
