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The cross elasticity of demand calculates the responsiveness of the quantity demanded of one product to alters in the price of another product. For example, the quantity demanded of Coca-Cola to alters in the price of Pepsi. Cross elasticity of demand gives an indication of how close a substitute or complement one commodity is for another. This concept has substantial practical value in formulating marketing strategies for most products.
Profit: This is surplus left over after a company sells its output and pays off cost of production (which includes raw materials, labour costs and a proportional share of its capit
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