If demand is unit elastic at all prices, then the demand curve is
A) a straight line.
B) perfectly horizontal.
C) a rectangular hyperbola.
D) a parabola.
E) upward sloping.

Question

Quizplus · Accepted Answer

A rectangular hyperbola is the shape of a demand curve that exhibits unit elasticity at all prices. It is characterized by a constant price elasticity of demand (PED) equal to -1, which means that a proportional change in price will lead to an equal proportional change in quantity demanded. This is often used as a benchmark for measuring the responsiveness of demand to price changes, and it is typically associated with goods that have many substitutes and are not necessities.

If Demand Is Unit Elastic at All Prices, Then the Demand