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3 Tutorials that teach Cross-Price Elasticity / Complements & Substitutes
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Cross-Price Elasticity / Complements & Substitutes

Cross-Price Elasticity / Complements & Substitutes

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Author: Catherine Barry
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This lesson will explain Cross-Price Elasticity / Complements & Substitutes
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Tutorial

Notes on "Cross-Price Elasticity/ Complements & Substitutes"

Terms to know

Cross-Price Elasticity 

Change of demand that occurs due to change in price of

substitutes or complements.

   (QuantityA - QuantityB) / (QuantityA + QuantityB)

   all divided by

   (PriceA - PriceB) / (PriceA + PriceB)

Substitute Goods 

As the price one good increases, the demand for an 

alternative good meeting the same consumer needs, increases.

Complement Goods

A good for which the demand increases as the price of an 

associated good decreases.