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Question

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

  1. equal slopes of the price demand curve
  2. price elasticity equal to unity
  3. varying price elasticity
  4. Both slope and price elasticity equal

A
price elasticity equal to unity
B
varying price elasticity
C
Both slope and price elasticity equal
D
equal slopes of the price demand curve
Solution
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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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