Cross-price Elasticity of Demand:
Cross-price elasticity of demand is the responsiveness of the quantity demanded of one commodity (say, A) to a change in the price of another commodity (say, B).
Measurement of Cross-price Elasticity of demand (CED)
It is measured as percentage change in demand for one commodity (say, A) divided by percentage change in the price of another commodity (say, B).
That is, cross price elasticity of demand between goods A and B is calculated are:
QA1 = the original demand for good A PB = the original price of good B
ΔQA = change in demand for good A
= New demand for good A minus the original demand for good A
ΔPB = change in price of good B
= New price og good B minus the original price of good B