In economics, what elasticity measures how demand for one good responds to a price change in another good?

Cross-price elasticity of demand measures how demand for one good responds to a price change in another good.

It is calculated as the percentage change in quantity demanded of one good divided by the percentage change in the price of another. A positive result generally indicates substitute goods: a rise in the price of tea may increase demand for coffee. A negative result generally indicates complements: a rise in printer prices may reduce demand for ink.

The size of the value indicates responsiveness, while the sign indicates the usual relationship. A value near zero suggests little connection between the goods.

This measure is useful in business and competition analysis, but the result depends on the goods, time period, market definition, and other factors held constant.