Responsiveness of a change in quantity demand of other good to a change in price of the good concerned is explained as cross elasticity of demand.
Cross elasticity of demand can be computed as follows

• Cross elasticity of demand = Percentage change in quantity demand of good X /                                                                                                   Percentage change in price of good Y

                                                                      (Exy = ΔQDX% / ΔPY% )

• When cross price elasticity is calculated , the answer is explained as coefficient of cross price elasticity of demand.

Goods can be classified according to the coefficient of cross price elasticity of demand as

• Substitutes
• Complementary goods
• If there is a positive slope of the demand curve which is drawn with substitute goods
• If there is a negative relation ship between the price of one good to the quantity of other good, then the goods are said to be complements.
• There is a negative slope of the demand curve which is drawn with complementary goods.
• If the cross elasticity of demand is zero that means there is no relationship between the two goods.( Unrelated goods)
• Cross elasticity of demand can be used practically as follows,
• To realize interrelationship between two goods.
• To recognize the quantity of production function to compiling economic policies.