A demand curve for which any price- quantity combination yields the same total expenditure reveals a price elasticity of demand equal to
A) not enough information to know.
B) infinity.
C) zero.
D) some value greater than one but less than infinity.
E) one.

Question

Quizplus · Accepted Answer

When the same total expenditure is achieved at every price-quantity combination, it means that the demand curve is a rectangular hyperbola. In this case, the price elasticity of demand is constant and equal to one (unit elastic). Therefore, the correct answer is E.

A Demand Curve for Which Any Price- Quantity Combination Yields