the demand for good A and the demand for good B are both price elastic
Yes, you can. When the cross-price elasticity between two goods is positive, they are more likely substitutes in consumption; when it is negative, they are more likely complements. A cross-price elasticity of 0 implies no correlation.
cross effect is positive in substitution effect and negative in complementry goods
Cross Elasticity Coefficient is defined as when the price of a particular commodity rises how is the demand of another commodity changing. If the goods are complements like say for example petrol and petrol driven cars, if there is a price hike in petrol then demand for petrol cars would fall. Hence a negative cross elasticity of coefficient. On the other hand the demand for deisel cars would rise (given the deisel prices are constant) because they serve as substitutes, and will have a positive cross elasticity.
The degree of change in the demand for one product as a response to a change in the price of a different product. For example, an increase in the price of petroleum is likely to have a negative impact on the demand for gas-guzzling vehicles and a positive impact on the demand for fuel-efficient vehicles. The cross elasticity for substitutes is generally positive, in that a price increase for one product will result in an increase in demand for a substitute.
Demand can be defined as the quantity of goods and services that a consumer is willing and ready to buy and at given price and at a particular period of time. Cross demand can be explain by using the knowledge of cross elasticity of demand. Hence cross demand is the same as cross elesticity of demand. Cross elasticity of demand measured the degree of responsiveness of the demand for one good due to a price change of another good. Complements goods are denoted by negative cross elasticity while substitude goods are denoted by positive elasticity. Cross demand is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. Take for instance, if, in response to a 5% increase in the price of Kerosine, the demand of new stove that are kerosine inefficient decreased by 10%, the cross elasticity of demand would be: -10% divided by 5% equal to -1
Yes, you can. When the cross-price elasticity between two goods is positive, they are more likely substitutes in consumption; when it is negative, they are more likely complements. A cross-price elasticity of 0 implies no correlation.
Actually, it's negative cross-elasticity because they are complements. i.e the price of one goes up, sales of the other will go down.
cross effect is positive in substitution effect and negative in complementry goods
Cross Elasticity Coefficient is defined as when the price of a particular commodity rises how is the demand of another commodity changing. If the goods are complements like say for example petrol and petrol driven cars, if there is a price hike in petrol then demand for petrol cars would fall. Hence a negative cross elasticity of coefficient. On the other hand the demand for deisel cars would rise (given the deisel prices are constant) because they serve as substitutes, and will have a positive cross elasticity.
the thing is that when there are two negatives you need to cross out those which will give positive times positive equals positive. this is the rule that you need to learn it. negative*negative=positive positive*positive=positive negative*positive=negative The same thing for devision
The degree of change in the demand for one product as a response to a change in the price of a different product. For example, an increase in the price of petroleum is likely to have a negative impact on the demand for gas-guzzling vehicles and a positive impact on the demand for fuel-efficient vehicles. The cross elasticity for substitutes is generally positive, in that a price increase for one product will result in an increase in demand for a substitute.
I am at a loss for the answer please help me.
Demand can be defined as the quantity of goods and services that a consumer is willing and ready to buy and at given price and at a particular period of time. Cross demand can be explain by using the knowledge of cross elasticity of demand. Hence cross demand is the same as cross elesticity of demand. Cross elasticity of demand measured the degree of responsiveness of the demand for one good due to a price change of another good. Complements goods are denoted by negative cross elasticity while substitude goods are denoted by positive elasticity. Cross demand is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. Take for instance, if, in response to a 5% increase in the price of Kerosine, the demand of new stove that are kerosine inefficient decreased by 10%, the cross elasticity of demand would be: -10% divided by 5% equal to -1
In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demand of a good to a change in the price of another good.
Cross elasticity in economics, also referred to as cross-price elasticity is used to measure the changes of the demand of a certain commodity to the price changes of another good.
price elasticity income elasticity cross elasticity promotional elasticity
According to the total expenditure method; Ep<1 Price of X increases then the expenditure on X increases. Thus the expenditure and demand on Y decreases. Cross price elasticity of X and Y i s negative, therefore they are compliments. Now Taking Ep>1...we can find out the relation of substitutes. Threfore own price and cross price elasticity is not totally independent of one another.