Cross Elasticity of Demand

Income Elasticity of Demand

Elasticity of Supply
 Example
• Tea and Coffee are two substitute goods. When
price of coffee is 5 Taka, quantity demanded for
tea is 10 units. If price of coffee increases to 10
Taka, quantity demanded for tea increases to 30
units. Calculate cross elasticity of demand.
• Tea and sugar are two complementary goods.
When price of sugar is 5 Taka, quantity
demanded for tea is 10 units. If price of sugar
increases to 10 Taka, quantity demanded for tea
decreases to 2 units. Calculate cross elasticity of
demand.
 Income Elasticity of Demand
• Measure of the responsiveness of the quantity
demanded for a good or service to a change in
income.
Elasticity of Supply