ELASTICIDAD CRUZADA. Ejercicios resueltos 👍

Understanding Cross Elasticity of Demand

Introduction to Cross Elasticity

• Eba Huesca introduces the concept of cross elasticity, which relates to price changes and demand functions involving two goods.

• The discussion references previous videos where demand was influenced by the prices of good X, good Y, and consumer income.

Calculating Cross Elasticity

• To calculate cross elasticity, one must derive the quantity demanded concerning the price of good Y. The coefficient for good Y's price in this case is -3.

• Using a previous example where the price of X was 150 and resulted in a quantity demanded of 770, the formula for cross elasticity is established as:

[

textElasticity = -3 times 10/770 = -0.039

]

Interpretation of Results

• A negative value (-0.039) indicates that goods X and Y are complementary; as one’s price increases, the demand for the other decreases.

• If cross elasticity were positive instead, it would suggest that goods X and Y are substitutes; an increase in one’s price would lead to an increase in demand for the other.

Conclusion on Relationships Between Goods

• The video emphasizes that cross elasticity helps determine whether two goods are complements or substitutes based on their respective prices.