Cross-Price Elasticity Calculator
Understanding Cross-Price Elasticity
What is Cross-Price Elasticity?
Cross-price elasticity measures how the demand for one good changes when the price of another related good changes. This metric helps businesses understand the relationships between products and make informed pricing decisions.
Interpretation of Results
- Positive Elasticity: Products are substitutes (e.g., Coke and Pepsi)
- Negative Elasticity: Products are complements (e.g., printers and ink)
- Zero Elasticity: Products are unrelated (e.g., books and oranges)