The elasticity which shows the responsiveness of the demand for a good due to changes in the price of a related good is the:
A) own price elasticity.
B) income elasticity.
C) log-linear elasticity.
D) cross-price elasticity.

Question

Quizplus · Accepted Answer

Cross-price elasticity measures the responsiveness of demand for a good due to changes in the price of a related good. It is calculated as the percentage change in the quantity demanded of one good divided by the percentage change in the price of the related good. Options A, B, and C do not involve changes in the prices of related goods.

The Elasticity Which Shows the Responsiveness of the Demand for a Good