FIGURE 4- 1
-Refer to Figure 4- 1, which shows two demand curves, one linear and the other a rectangular hyperbola. The price elasticity of demand is equal to one along the entire demand curve in
A) diagram 2 only.
B) diagram 1 only.
C) both diagrams.
D) neither diagram.

Question

FIGURE 4- 1
-Refer to Figure 4- 1, which shows two demand curves, one linear and the other a rectangular hyperbola. The price elasticity of demand is equal to one along the entire demand curve in
A) diagram 2 only. 
B) diagram 1 only. 
C) both diagrams. 
D) neither diagram.

Quizplus · Accepted Answer

A rectangular hyperbola demand curve has a constant price elasticity of demand equal to one along its entire length.

FIGURE 4- 1 -Refer to Figure 4- 1, Which Shows Two Demand Curves