Term:
Cross price elasticity of demand
Definition:
Cross price elasticity of demand refers to the percentage change in the quantity demanded of a given product due to the percentage change in the price of another "related" product. If all prices are allowed to vary, the quantity demanded of product X is dependent not only on its own price (see elasticity of demand) but upon the prices of other products as well.
Domain:
Finance
Source:
Glossary of Industrial Organisation Economics and Competition Law, compiled by R. S. Khemani and D. M. Shapiro, commissioned by the Directorate for Financial, Fiscal and Enterprise Affairs, OECD, 1993