Final answer:
Price parity refers to the perception that two products of similar prices might be equal in quality and value, a concept distinct from cross-price elasticity of demand, which measures how the demand for one good is affected by the price change of another good.
Step-by-step explanation:
The concept you're asking about is known as price parity. Price parity suggests that if the prices of two products are similar, they are often perceived by consumers to be similar in quality and value. This assumption, however, isn't always accurate, as prices can be influenced by various factors such as branding, marketing strategies, or different cost structures.
The concept you touched upon regarding the cross-price elasticity of demand is related but not identical to price parity. Cross-price elasticity measures the sensitivity of demand for one good in response to a price change of another good. This is prominently observed in substitute goods, which have a positive cross-price elasticity, and complementary goods, which have a negative cross-price elasticity. The classic examples being if tea (substitute) becomes more expensive, more people may purchase coffee. Conversely, if sugar (complement) becomes more expensive, it might reduce the demand for coffee, as both are often consumed together.