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Question

What is cross elasticity of demand in case of pure monopoly?


A

Zero

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B

Low

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C

High

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D

Medium

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Solution

The correct option is A

Zero


A pure monopoly refers to a single seller who has full control over the supply of a commodity which has no substitutes in the market. Hence, the cross elasticity of demand between the product of the pure monopolist and the product of any other seller is zero.


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