Final answer:
The cross-price elasticity of demand indicates how the demand for jerseys is affected by changes in the price of skates, with the relation being positive for substitutes and negative for complements.
Step-by-step explanation:
The cross-price elasticity of demand is a measure used in economics to show how the quantity demanded of one good (jerseys, in this instance) is affected by a change in the price of another good (skates). If jerseys and skates are substitute goods, an increase in the price of skates would lead to an increase in the demand for jerseys, resulting in a positive elasticity. On the other hand, if jerseys and skates are complement goods, an increase in the price of skates would lead to a decrease in the demand for jerseys, signifying a negative elasticity.
This measurement is impactful for businesses and consumers alike, as it helps predict market movements and consumer behavior based on pricing changes. To calculate it, you divide the percentage change in the quantity demanded of jerseys by the percentage change in the price of skates.