Cross Price Elasticity of Demand: Definition and Formula Video

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

How does price elasticity of demand and cross price elasticity of demand differ?

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1. Cross price elasticity of demand is equal to the percentage change in quantity demanded for Product A, divided by:

2. If the cross price elasticity between apples and oranges is 2, which is correct?

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About This Quiz & Worksheet

There is a cross price elasticity of demand formula for determining if products are complementary or substitutes. Practice questions in this assessment assess your understanding of this concept and formula.

Quiz & Worksheet Goals

In this assessment you will be tested over your ability to understand:

  • How responsive the quantity demanded for a product is after a change in price
  • The cross price elasticity of demand formula
  • The difference between product substitutes and product complements
  • How to interpret and use cross price elasticity of demand in your business

Skills Practiced

This quiz and worksheet will help you practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on cross price elasticity of demand
  • Critical thinking - apply relevant concepts to examine information about pricing products in a different light
  • Problem solving - use acquired knowledge to solve cross price elasticity of demand practice problems
  • Distinguishing differences - compare and contrast topics from the lesson, such as complements and substitutes

Additional Learning

To improve your knowledge of product pricing, review the lesson called Cross Price Elasticity of Demand: Definition and Formula. This lesson covers the following about cross price elasticity of demand:

  • Definition and use
  • Formula and rule of thumb
  • Examples in business
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