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Two qstns from ISI sample pprs:
Q1- A monopolist has contracted with the government to sell as much of its output as it likes to the govt. at Rs100 per unit , and it also sells to the buyers at Rs. 150 per unit. What is the price elasticity of demand for the monopolist services in the private market?
Q2-A consumer consumes two goods x1 and x2 with the following utility function
u(x1, x2)= u1(x1) + u2(x2)
Suppose the income elasticity is positive . It is claimed that in the above set up all goods are normal .
Prove or disprove this claim. ( How to approch such questions)
Help!
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