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26 January, 04:31

# The formula for the cross-price elasticity of demand is percentage change in rev: Multiple Choice quantity demanded of B/percentage change in price of B. quantity demanded of B/percentage change in income. quantity demanded of B/percentage change in price of A. price of B/percentage change in quantity demanded of A.

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Answers (1)
1. 26 January, 04:38
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Quantity demanded of B/percentage change in price of A.

Explanation:

Cross price elasticity of demand is calculated as follows:

= Percentage change in quantity demanded for Good B : Percentage change in price of good A

Cross price elasticity of demand is positive for the substitute goods and negative for the complimentary goods.

For Substitute goods:

It states that there is a positive relationship between the price of a good and the quantity demanded for its substitute goods.

For complimentary goods:

It states that there is an inverse or negative relationship between the price of a good and the quantity demanded for its complimentary goods.
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