XED Cross Price Elasticity of Demand 0.0 / 5 ? EconomicsCompetitive marketsASOCR Created by: SimoneCreated on: 05-01-14 13:55 Define XED measures the responsiveness of demand for one product to changes in the price of another 1 of 9 If XED is positive + = substitutes 2 of 9 If XED is negative - = compliments 3 of 9 What does the size of the XED indicate? the strength between the two products 4 of 9 What does XED 0 indicate? 2 goods with little relation 5 of 9 Business Relevance? affects pricing decisions and marketing techniques 6 of 9 Explain pricing decisions a good with high positive XED (close substitutes) may seek to reduce price to steal market share from competitors 7 of 9 Explain marketing techniques strong complements can be identified and increase their revenue 8 of 9 Determinant of XED relationship with other goods 9 of 9
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