cross elasticity of demand measures how sensitive purchases of a specific product are to changes in,

0
15
person, pear, lightbulb @ Pixabay

What is Cross Elasticity of Demand? This term measures how sensitive purchases of a specific product are to changes in prices for different products. It can be used by businesses to evaluate whether or not they should increase the price of one product if it is highly correlated with another. In this blog post, we will discuss what cross elasticity of demand is and provide an example that illustrates its use. The cross elasticity of demand is a measure that determines how sensitive the purchase of one product or service is to changes in prices for different products. It can be used by businesses to evaluate whether or not they should increase the price of one product if it is highly correlated with another. For example, companies may want to raise their prices on ice cream cones during summer months because there will likely be an increased demand due to higher temperatures, but at what point does this backfire and cause customers stop buying all three items? The answer depends heavily on how much consumers are willing to buy other goods when the cost rises for given ones. It’s important for managers who use this metric as part of their decision-making process understand its limitations.

LEAVE A REPLY

Please enter your comment!
Please enter your name here