Question

Explain the influence of following on price elasticity of demand of a good:
(a) Substitute goods.
(b) Own price of the good

Answer 1

Answer:

Explanation:

The cross elasticity of demand is an economic concept that measures the responsiveness in the quantity demanded of one good when the price for another good changes. Also called cross-price elasticity of demand, this measurement is calculated by taking the percentage change in the quantity demanded of one good and dividing it by the percentage change in the price of the other good.

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