The Cross-Price Elasticity of Demand
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Why is cross elasticity of demand a frequently used measure of substitution?
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The Cross-Price Elasticity of Demand is exhibited. References are also provided.
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Why is cross elasticity of demand a frequently used measure of substitution?
The Cross-Price Elasticity of Demand measures the rate of response of quantity demanded of one good, due to a price change of another good. If two goods are substitutes, we should expect to see consumers purchase more of one good when the price of its substitute increases. ...
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