New Concepts
- Cross Elasticity of Demand (XED)
- Definition
- Formula
- Significance with respect to substitutes and compliments
Resources:
Power Point - Cross Elasticity of Demand
Khan Academy Video - Cross Elasticity of Demand
Mr. Clifford Video - Cross Elasticity of Demand
Textbook Pages 53-54
Khan Academy Video - Cross Elasticity of Demand
Mr. Clifford Video - Cross Elasticity of Demand
Textbook Pages 53-54
XED = % Change in Quantity Demanded of product x
% Change in Price of product y
If XED is a positive number than product X and product Y are viable substitutes.nThe higher the number the closer the substitute they are
If XED is a negative number than product X and Y are complimentary goods.nThe higher the negative number the more complimentary they are
If XED is close to zero the products are basically unrelated.nThe closer to zero the products are the more unrelated they are
Homework: Due Friday October 26
No comments:
Post a Comment