Abstract
The concepts of cross elasticity of demand and cross elasticity of supplywere introduced into the economic literature in the early 1950s as criteria that could be used, among others, to formulate appropriate definitions ofproduct markets. These concepts deal with the relationship among goods as perceived by buyers and sellers, respectively. Operationally, these concepts are delineated by the computation of a coefficient of cross elasticity whereinthe percentage change in a quantity demanded or quantity supplied of one good reacts to a percentage change in the price of a different good. A positive value for a coefficient of cross elasticity of demand suggests that thetwo goods are viewed as substitutes by consumers. On the other hand, a negative value for a coefficient of supply elasticity suggests that the two goods are viewed as substitutes in the eyes of producers.
Recommended Citation
Greco, Anthony J. PhD
(2012)
"Cross Elasticity of Supply: Everywhere but in Print,"
Journal of Business, Industry, and Economics: Vol. 17, Article 1.
Available at:
https://roar.una.edu/jobie/vol17/iss1/1