Cross-Price Elasticity and Income Elasticity of Demand: Are Your Students Confused?
The American Economist, Vol. 54, No. 2, pp. 107-110, Fall, 2009
4 Pages Posted: 7 Mar 2010
Date Written: 2009
The authors demonstrate that most textbooks are ambiguous at best in their treatment of cross-price and income elasticity of demand. There is also no discussion of what initiates a price increase in discussions of substitutes and complements in the textbooks examined. The authors offer a remedy for these deficiencies.
Keywords: Cross-Price Elasticity, Income Elasticity of Demand, Economic Education
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