Question

What is cross price effect????I want in terms of demand.....

Answer 1

HEY MATE HERE IS YOUR ANSWER

CROSS PRICE EFFECT:

Cross price effect refers to the effect of change in the price of good X on the demand for good Y, when X and Y are related goods.

HOPE IT HELPS YOU

FOLLOW ME FOR ANY OTHER QUESTIONS

Answer 2

Heya....

What is cross price effect???

It is the effect of change in price of the related good on the demand of existing good....

Cross price effect in context of demand...

""" Related goods are divided into two parts...

1 Subsitute goods...

Having positive relationship with demand...

Example,, Tea and Coffee..

"" Rise in price of substitution goods leads to rise in demand of our goods as consumer will shift to our good...

"" Fall in price of substitution good decry in the demand if our good , as consumer prefer that less priced good...

2 Complementary goods..

Having inverse relationship with the demand of our good...

Example,, Car and Petrol

"" Rise in price if complementary good leads to fall in demand of our good...

"" Fall in price of that good will raise the demand of our good...

-- Be Brainly...