In defining cross elasticity of demand, it is helpful to define it in terms of the purpose of the study of economics -- which is to analyze the production, distribution, and consumption of anything manufactured or any service provided. It is also to think about the meaning of demand in economic terms; it is desire to own and ability/willingness to pay. That being said, demand fluctuates based
. upon price. In other words, the higher the price, the lower the demand, and vice versa. The cross elasticity of demand analyzes the impact that a change in price has to the demand. You can find more information here: http://en.wikipedia.org/wiki/Cross_elasticity_of_demand
