From ad7096bca2a75534021ed5e3bf8140b950462791 Mon Sep 17 00:00:00 2001 From: Akbar Rahman Date: Sat, 2 Mar 2024 14:28:24 +0000 Subject: [PATCH] explain xed value --- uni/mmme/3049_engineering_management_2/xed.md | 5 +++++ 1 file changed, 5 insertions(+) diff --git a/uni/mmme/3049_engineering_management_2/xed.md b/uni/mmme/3049_engineering_management_2/xed.md index 81f4be9..038c69f 100755 --- a/uni/mmme/3049_engineering_management_2/xed.md +++ b/uni/mmme/3049_engineering_management_2/xed.md @@ -6,6 +6,8 @@ tags: [] uuid: d6b6e3dd-1bba-466a-aad8-9e39c68280ab --- +# Cross Elastic Demand (XED) + The equation given in the lecture slides is: $$\text{XED} = \frac{\frac{\Delta q_A}{q_A}}{\frac{\Delta p_B}{p_B}}$$ @@ -17,6 +19,9 @@ $$\text{XED} = \frac{\text{percentage change in quantity of A}}{\text{percentage change in price of B}} $$ +If XED is positive, the two goods A and B are substitutes for each other. +If XED is negative, the two goods are complimentary. + ## Example ![A question from the book (page 91)](./images/xed_question.png)