For the demand function of good x, Qd=f(Px,Py,M), the sum of own price elasticity, cross price…
Marshallian demand is homogeneous of degree zero in all prices and income. Euler's theorem gives PxQx+PyQy+MQM=0; dividing by Q yields the signed elasticity sum zero. This…
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For the demand function of good x, Qd=f(Px,Py,M), the sum of own price elasticity, cross price elasticity and income elasticity of demand would be:
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Correct answer B
Marshallian demand is homogeneous of degree zero in all prices and income. Euler's theorem gives PxQx+PyQy+MQM=0; dividing by Q yields the signed elasticity sum zero. This uses the standard no-money-illusion demand assumptions.
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UGC NET Economics