| Cross-Price Elasticity (XED)
XED is a measure of sensitivity or quantity demanded for a
good or service to a change in the price of some other good or service. This
shows the interrelationship between 2 goods. If the result of the equation is a
positive number; then we would expect the products to be substitutes.
Conversely if the result is a negative number then we would expect the products
to be complimentary. This can be used by a company to work out its close
competitors.
Page last updated on 20/10/13
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