Advertisements
Advertisements
Question
Give the formula to measure cross elasticity of demand.
Equation/Formula
Advertisements
Solution 1
`e_(XY) = "Percentage change in the quantity demanded of commodity X"/"Percentage change in the price of commodity Y"`
`e_(XY) = (DeltaQ_x)/(DeltaP_y)`
where, eXY = stands for cross elasticity of demand of X for Y
QX = stands for the initial quantity demanded of commodity X
ΔQX = stands for change in quantity demanded of commodity X
PY = stands for the initial price of commodity Y
ΔPY = stands for change in price of commodity Y
shaalaa.com
Solution 2
`(DeltaQ_x)/(DeltaP_y) xx (P_y)/(Q_x)`
shaalaa.com
Notes
Students should refer to the answer according to the question.
Is there an error in this question or solution?
