There isn't much left to say about cross-price elasticity. As we learned, the sign depends on whether the two goods are complements or substitutes, and the size of the measure indicates the strength of the relationship. In general, we don't have terminology (such as elastic and inelastic) to distinguish the size of the relationship.

   If the two goods aren't related in consumption, will be close to zero. That is, a change in the price of one good will have little effect on the desired quantity demanded of the other good.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved