Answer to Question #150889 in Macroeconomics for Chirag Rajyaguru

Question

What is the features of cross elasticity of demand

Answer 1

Cross elasticity of demand measures the response of a consumer to a substitute or complementary good or service following a price change. Thus, different features can be associated with the cross elasticity of demand. One such feature is that the products or services should be complementary or substitute. Another feature is that there should be a price change for the complementary or substitute good or service.