The cross elasticity of demand measures the responsiveness of the quantity demanded of a particular good to changes in the prices of
Its substitute and its complements .
Its substitute but not its complements .
It complements but not its substitutes
None of these
Complementary goods have :
The same elasticities of demand
Very low price elasticities of demand
Negative cross price elasticities of demand with respect to each others .
If goods are complements , definitely their :
Cross elasticities are positive
Cross elasticities are negative
Income elasticities are negative
Price elasticities are negative
Which of these measures the responsiveness of the quantity of one good demanded to an increase in the price of another goods .
Price elasticity
Income elasticity
Cross elasticity
PED =
Percentage change in quantity demanded / Percentage change in Price
Percentage change in demanded / Percentage change in supply
Percentage quantity demanded / Percentage change in Price
Percentage quantity demanded / Percentage change in demand
Demand will be more elastic ,
The higher the income
The lower the price
The shorter the passage of time after a permanent price increase
The more substitutes available for the good
If demand is price elastic :
A 1 percent decrease in the price leads to increase in the quantity demanded that exceeds 1 percent .
A 1 percent increase in the price leads to an decrease in the quantity demanded that exceeds 1 percent
The price is very sensitive so any shift the supply curve .
A 1 percent decrease in the price leads to an increase in the quantity demanded that exceeds 1 percent
__________ is a measure of the responsiveness of demand for one good to a change in the price of another good and involves demand curve shifts .
Cross price elasticity of demand (XED)
Price elasticity of demand (PED)
Unit elesticity of demand
Price elasticity of supply
The demand curve in the figure above illustrates the demand for a product with:
Zero price elasticity of demand at all price .
Infinite price elasticity of demand
Unit price elasticity of demand at all prices
__________ is a measure of the responsiveness of demand to changes in income and involves demand curve shift .
Income elasticity of demand (YED)
Cross elasticity of demand( XED)
