Archive | Cross

The below mentioned article provides study notes on cross elasticity of demand. EXY = % change in quantity demanded for Y/% change in price X EXY = ∆QY/QY/∆PX/PX = ∆QY/∆PX. PX/QY Cross elasticity may be positive or negative, depending on the relationship between the two commodities. If the commodities are substitutes, cross elasticity will be positive, i.e., a rise in [...]