3) Cross Elasticity of Demand (Exy ) :
Cross Elasticity of Demand is defined as the proportionate change in quantity demand for a commodity ( say X) due to the proportionate change in price of another commodity ( sayY ). In other words , it is the ratio of percentage change in quantity demand for X goods and percentage change in price of Y goods . Thus,
This holds true for related goods like tea and coffee, petrol and bike, etc. The related goods are either complementary or substitute goods.