Economics Supply And Demand Questions
Cross-price elasticity of supply is a measure that quantifies the responsiveness of the quantity supplied of a particular good to a change in the price of another related good. It indicates the degree to which the supply of one good is influenced by changes in the price of another good. A positive cross-price elasticity of supply suggests that the two goods are substitutes in production, meaning that an increase in the price of one good will lead to an increase in the supply of the other good. Conversely, a negative cross-price elasticity of supply indicates that the two goods are complements in production, implying that an increase in the price of one good will result in a decrease in the supply of the other good.