Cross-Price Elasticity of Demand Calculator

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The midpoint method divides changes by the average of start and end values, giving the same result regardless of direction. The standard method divides by the initial values only.
The original price of Good X before the change.
$
The new price of Good X after the change.
$
The quantity of Good Y demanded before the price of Good X changed.
units
The quantity of Good Y demanded after the price of Good X changed.
units
Cross-Price Elasticity (XED)Weak substitutes
0.8182

Percentage change in quantity of Y divided by percentage change in price of X

% Change in price of X0.22%
% Change in quantity of Y0.18%
Relationship typeWeak substitutes
Elasticity magnitudeInelastic (|XED| < 1)
0.8182 XED
Close complements<-1Weak complements-1-0Independent0-0.001Weak substitutes0.001-1Close substitutes1+

XED = 0.8182: Good Y and Good X are weak substitutes.

  • The price of Good X rose by 22.2% and demand for Good Y increased by 18.2%.
  • Mild positive relationship - Y gains some demand when X becomes pricier, but the effect is small.
  • A cross-price elasticity less than 1 in absolute terms means the relationship is inelastic - demand for Y reacts less than proportionally to price changes in X.
  • Businesses can exploit substitute relationships through competitive pricing - lowering X's price may pull buyers back from Y.

Next stepResult uses the midpoint (arc elasticity) method. For more context, compare this with own-price elasticity of demand for Good Y and income elasticity to build a fuller demand model.

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