Explain the following question by logical answers (a) Explain why the cross elasticity of demand for substitute goods is positive and the cross elasticity of demand for complements is negative. (b) Explain why the price elasticity of demand changes along a linear demand curve. (c) Why the demand curve is perfectly elastic in perfect competition? (d) Law of diminishing marginal utility is especially applicable in agriculture sector. Comment
Explain the following question by logical answers (a) Explain why the cross elasticity of demand for substitute goods is positive and the cross elasticity of demand for complements is negative. (b) Explain why the price elasticity of demand changes along a linear demand curve. (c) Why the demand curve is perfectly elastic in perfect competition? (d) Law of diminishing marginal utility is especially applicable in agriculture sector. Comment
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Explain the following question by logical answers
(a)
Explain why the cross elasticity of demand for substitute goods is positive and the cross
elasticity of demand for complements is negative.
(b)
Explain why the price elasticity of demand changes along a linear demand curve.
(c)
Why the demand curve is perfectly elastic in perfect competition?
(d)
Law of diminishing marginal utility is especially applicable in agriculture sector. Comment
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