Answer to Question #224274 in Microeconomics for Salo

Question

A cross price elasticity between two product use demand and supply analysis with help of diagram

Answer 1

Cross-price elasticity tends to measure how sensitive a product's demand is compared to a shift of the corresponding price for the product. Within the market, other goods may relate to each other, which implies that the decrease or increase of good’s price may significant impact the demand of another good.