1. Cross Price Elasticity of Demand

2. Definition  The responsiveness of the demand for a good to a change in the price of another good.

3. Cross Price Elasticity  Percentage change in quantity demanded of product A  _______________________________________  Percentage change in price of product B

4. Positive Elasticity  Goods that are substitutes have a positive cross elasticity.  Why?

5.  Butter and Margarine

6. Negative Elasticity  Goods that are complements will have a negative elasticity.  Why?

7. Negative Elasticity

8.  Baseball tickets and roasted peanuts

9. Joint Supply  These are goods that come from the same source, however they are neither substitutes nor complements.  Lamb and Wool  Beef and Leather

10. Independent Goods  Goods that have nothing to do with each other will have no elasticity.  Fried chicken and books about the second world war.

11.  Wombats and James Bond Mankinis

12.  Puppies and Captain Jack Sparrow costumes

13.  Rabbit hats for cats and toilet plungers

14. Dog costumes and David Hasselhof Posters

15. Compliment or Substitute

16. Positive or Negative

17. Compliment or Substitute

18. Positive or Negative

19. Complement or Substitute