Cross Elasticity measures how the quantity demanded of one good responds to a change in the price of another good. It helps determine whether two goods are substitutes or complements. A positive cross elasticity indicates that the goods are substitutes, meaning if the price of one rises, the demand for the other increases. Conversely, a negative cross elasticity suggests that the goods are complements, meaning if the price of one rises, the demand for the other decreases. Understanding cross elasticity is essential for businesses and economists to analyze market dynamics and consumer behavior.