Importance of cross elasticity, Managerial Economics

Importance of Cross Elasticity

Knowledge of cross elasticity is necessary when the government wants to impose a tariff on an imported commodity to protect a domestic industry.

Firms need to know the cross elasticity of their products and substitute products when contemplating price rises.

Firms also need to know the cross elasticity of the products and complements to plan their production.

Posted Date: 11/27/2012 6:40:02 AM | Location : United States

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