Learning objectives
Define cross elasticity of demand and calculate XED = %ΔQd of good A ÷ %ΔP of good B
Use the sign and size of XED to identify substitutes, complements and unrelated goods and the strength of the link between them
Apply XED to decisions by firms, such as responding to a rival's price cut or pricing complementary products
Continue with a revision plan
These learning objectives are available to everyone. Sign in with an eligible plan to read the full note and worked examples.