Question

29. In cross elasticity of demand, for
unrelated goods the demand curve
will be------- *
O A. Horizontal straight line
O B. rectangular hyperbola
O C. vertical line
O D. none of the above​

Answer 1

Explanation:

A downward slopping demand curve not have uniform elasticity of demand at all points, others have uniform elasticity like zero in the case of vertical demand curve, equal to one represented by a rectangular hyperbola curve, and infinity given by a horizontal demand curve, at all points

Answer 2

Option c is the correct answer.

In cross elasticity of demand, for unrelated goods the demand curve will be vertical line.

1. Cross elasticity of demand measures the changes in the quantities of one good due to change in the price of other goods.
2. It is mainly applicable in the case of substitutes and complementary goods.
3. If goods are unrelated they wont be affected by each other therefore they will have zero cross elasticity.
4. It is so because demand of the good will remain constant irrespective of the price of other good.