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Economic Definition of cross-price elasticity of demand. Defined.

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Term cross-price elasticity of demand Definition: The relative response of a change in demand to a relative change in the price of another good. More specifically the cross elasticity of demand can be defined as the percentage change in demand for one good due to a percentage change in the price of another good. The cross elasticity of demand quantitatively identifies the theoretical relationship between other prices and demand discussed by the other prices. This elasticity should be compared with price elasticity of demand and income elasticity of demand. You might want to check out elasticity for a little background.


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