Logged out
Access All our Essays in an Instant
Swap your work for FREE access, or pay £4.99 for instant access
Explain what is meant by cross-elasticity of demand.
Member rating: No Rating | Words: | Submitted: Mon Jun 19 2006
Page Preview
On the left is an image preview of every page of this document, and below are the first 150 words with formatting removed:
Osman Chopdat Hand In Date 6/12/02 M.Keane BABS Managerial Economics Assignment 1 Question 3. Explain what is meant by cross-elasticity of demand. Discuss how information about cross-elasticity of demand might be used by an organisation of your choice. Introduction; what is Cross Elasticity Of Demand? In Simple terms cross elasticity of demand can be described as the measure for the responsiveness of demand for good X to a given change in the price of good Y. Cross elasticity of demand measures the direct impact of changing a products price on the demand of a similar product. An example can by prices of apples rising by 10% might lead to demand for bananas rising by 15%. Cross elasticity provides a measure of the degree of substitutability or complementarily between products. This is defined as the percentage change in quantity demand of good X divided by the percentage change in price of good Y. EXY = Percentage change in quantity demand of good...
Get instant access
- Instant, unlimited access to our documents in full
- Swap your work for free access, or pay £4.99
- To see the full version of this document and 150,112 others
