Cross-Price Elasticity of Demand Calculator
Measure how the demand for one good responds to a price change in a related good. A positive XED means the goods are substitutes (butter vs margarine); a negative XED means they are complements (cars and petrol).
Substitutes
- 1
% change in quantity of Good A
(120 − 100) ÷ 100 × 100 = 20 % - 2
% change in price of Good B
(60 − 50) ÷ 50 × 100 = 20 % - 3
Cross-Price Elasticity (XED)
20 % ÷ 20 % = 1Positive = substitutes, negative = complements, near zero = independent.
How does this calculator work?
XED = [(Q₂ − Q₁)/Q₁] ÷ [(P₂ − P₁)/P₁]. A positive result means substitutes (demand for Good A rises when Good B costs more); negative means complements (demand falls together); near zero means independent. Enter initial and final quantities and prices for an instant result.
Formula
How this is calculated
Cross-price elasticity of demand (XED) measures how the quantity demanded of one good (Good A) responds to a price change in a different good (Good B). The formula divides the percentage change in quantity demanded of Good A by the percentage change in the price of Good B. Enter the initial and final quantities and prices to compute it.
The sign of XED reveals the economic relationship: a positive value means the goods are substitutes — consumers swap to Good A when Good B gets more expensive (for example, Coca-Cola and Pepsi, or butter and margarine). A negative value means the goods are complements — they are consumed together, so a price rise in Good B reduces demand for both (cars and petrol, or printers and ink). Values close to zero indicate the goods are unrelated, so a price change in one has little effect on demand for the other.
The magnitude matters as well as the sign: an XED of +2.5 indicates very strong substitutability, while +0.2 suggests only weak substitution. Note that XED is asymmetric — the XED of Good A with respect to Good B's price need not equal the reverse. Results also differ in the short and long run, since consumers adjust purchasing habits gradually.
Frequently asked questions
A positive XED means the goods are substitutes: when the price of Good B rises, consumers switch to Good A, increasing its demand. The higher the positive number, the closer the substitute relationship — for example, different brands of the same product typically have a high positive XED.
A negative XED means the goods are complements — consumed jointly. When Good B becomes more expensive, demand for Good A also falls. Classic examples include cars and fuel, or smartphones and phone cases.
Own-price elasticity (PED) measures how a good's demand responds to changes in its own price. Cross-price elasticity measures how demand for one good responds to a price change in a different good. Both use the same percentage-change ratio formula but with different variables.
Also known as
TG we-Calculate Editorial Team. (2026). Cross-Price Elasticity of Demand Calculator [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/cross-price-elasticity-calculator
TG we-Calculate Editorial Team. "Cross-Price Elasticity of Demand Calculator." TG we-Calculate. 2026. https://we-calculate.com/calculator/cross-price-elasticity-calculator.
TG we-Calculate Editorial Team, "Cross-Price Elasticity of Demand Calculator," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/cross-price-elasticity-calculator
@misc{wecalculate_cross_price_elasticity_calculator, title = {Cross-Price Elasticity of Demand Calculator}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/cross-price-elasticity-calculator}}, year = {2026}, note = {TG we-Calculate} }
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