Finance Formulas / July 17, 2018 / Kenley Hopper
When the cross elasticity of demand for product A relative to the change in the price of product B is negative, it means that the quantity demanded of A has decreased relative to an increase in the price of product B. An increase in the price of B will reduce the quantity demanded of A.
So how do you know if you’re spending the right amount? You need some numbers. First, you need to know how long the average customer sticks with you before they cancel their service. Because of course the longer a customer sticks with you, the more valuable they are.
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