The responsiveness of the quantity demanded to a change in the value of the price of a related product contained in the demand function is the cross price elasticity of demand.

Question

Quizplus · Accepted Answer

This statement is true as cross price elasticity of demand measures the percentage change in quantity demanded of one good in response to a percentage change in the price of another good. It reflects the degree of substitute or complement between two related goods.

The Responsiveness of the Quantity Demanded to a Change in the Value