What is the formula to measure the cross elasticity of demand?

Ed = Percentage change in demand of commodity X/Percentage change in price of commodity Y

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Ed = Ratio of percentage change in the quantity demanded/Percentage change in income

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Ed = Percentage change in demand/Percentage change in income

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Ed = Percentage change in quantity demanded/Percentage change in price

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Solution

The correct option is A
Ed = Percentage change in demand of commodity X/Percentage change in price of commodity Y

The cross elasticity of demand measures the responsiveness of demand of a commodity to a change in the price of other related commodities.

Formula to measure cross elasticity of demand:

E= Percentage change in demand of commodity X/ Percentage change in price of commodity Y

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Similar questions

Elasticity of demand, measured by comparing the ratio of percentage change in the quantity demanded to the percentage change in the price of a commodity, is known as

Q. When percentage change in quantity demanded is equal to the percentage change in price, the elasticity of demand is __________.

Q. According to percentage method or arithmetic method of elasticity of demand, If percentage change in quantity demanded is less than percentage change in price, the elasticity is said to be ________________.

What is the situation implies in the case where the demand is greater than unitary elastic when percentage change in quantity demanded in response to change in price of the commodity?

Q. When percentage change in quantity equals percentage change in price, magnitude of elasticity of demand is equal to .

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