Price, income, and cross-price elasticities of demand

Topic Page

Questions

• What is an example of a situation where a cross price elasticity of demand is common?
• Why is the concept of cross price elasticity of demand important?
• Within the cross-price elasticity demand equation, what does a positive net value denote and what does a negative net value denote?
• What is the cross-price elasticity of demand?
• Can cross-price elasticity be negative?
• For what types goods would cross-price elasticity be positive?
• How does the cross-price elasticity of a substitute good differ from that of a complementary good?