Cross elasticity of demand
This is the responsiveness of quantity demanded to changes in the price of other goods. It is the relation between the proportionate change in the quantity demanded of commodity X to the proportionate change in the price of a related commodity Y.
Substitutes have a positive cross elasticity of demand. A rise in the
price of commodity Y leads to an increase in the demand for commodity X. The larger it is, the closer the substitutes. Poor substitutes have a low positive cross elasticity of demand. Cross elasticity of demand for complementary goods is negative. The higher the negative value of cross elasticity between two goods, the greater the degree of complementarities between them.
Substitutes have a positive cross elasticity of demand. A rise in the
price of commodity Y leads to an increase in the demand for commodity X. The larger it is, the closer the substitutes. Poor substitutes have a low positive cross elasticity of demand. Cross elasticity of demand for complementary goods is negative. The higher the negative value of cross elasticity between two goods, the greater the degree of complementarities between them.