Introduction to Cross Elasticity of Demand and Classification of Substitute and Complementary Goods

The video tutorial explains the concept of cross elasticity of demand, which measures how the demand for one product changes in response to the price change of another product. It covers the calculation of cross elasticity using a specific formula and discusses how to classify products as substitutes or complements based on their cross elasticity values. Substitute goods have a positive cross elasticity, while complementary goods have a negative one. The tutorial also highlights the graphical representation of these concepts and concludes with a summary of the key points.

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