Question

A rectangular hyperbola Shaped demand curve on all its points has _____________.

A

equal slopes of the price demand curve

B

price elasticity equal to unity

C

varying price elasticity

D

Both slope and price elasticity equal

Medium

Solution

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Correct option is B)

Rectangular hyperbola is a curve under which all rectangular areas are equal. When the elasticity of demand is equal to unity (ed = 1) at all points of demand curve, then the demand curve is rectangular hyperbola.

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