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demand, cross elasticity

Definition:
Cross elasticity of demand measures one of the most important demand relationships - the closeness of substitutes or the degree of complementarity of demand. A high cross elasticity means that the commodities are close substitutes. A cross elasticity of zero means that they are independent of each other in the market, and a negative cross elasticity means that the goods are complementary in the market in that one stimulates the sales of the others.

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© Westburn Publishers Ltd 2002, The Westburn Dictionary of Marketing edited by Michael J Baker, ISBN 978-0-946433-01-8. www.themarketingdictionary.com. Entry: [Michael J. Baker], [1998].