Which of the following best describes the concept of 'Cross Elasticity of Demand'?
A. Responsiveness of quantity demanded of a good to a change in its own price
B. Responsiveness of quantity demanded of a good to a change in the price of another good
C. Responsiveness of quantity demanded to a change in income
D. Responsiveness of supply to a change in price
Answer: Option B
Solution (By JKSSB Mock Tests)
Cross elasticity of demand measures how the quantity demanded of one good responds to a change in the price of another related good. It is positive for substitutes and negative for complements.
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