Elasticity of Demand and Supply - Cross-Elasticity of Demand

4 important questions on Elasticity of Demand and Supply - Cross-Elasticity of Demand

What does cross-elasticity measure?

How the quantity demanded of good X responds to price changes of another product Y. Formula:
E = percentage change in quantity demanded of X
        percentage change in price of product Y
Both calculated by using the average price of before and after.

What does it mean if the cross-elasticity is positive?

The two goods are substitutes (Evian and Chaudfontaine)

What does it mean if the cross-elasticity is negative?

The two goods are complementary: they are sold 'together', so a rise in price of the one reduces demand for the other.
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What does it mean if the cross-elasticity is zero, or near-zero?

The goods are independent.

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