Cross-Price Elasticity of Demand (CPED)

Cross-Price elasticity looks at consumer demand and the price elasticity across products.

Cross-Price Elasticity of Demand (CPED) differs from Price Elasticity of Demand (PED) because CPED measures the change in demand for a product caused by changes in price for substitute goods.

The formula for calculating CPED is very similar to the formula for PED. It differs in that the top and bottom of the equation are for separate products. It looks like this: CPED = (% change in Quantity of X demanded) / (% change in Price of Y).