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Question
When the demand curve has the shape of rectangular hyperbola curve, the price elasticity of demand at all the points will be ______.
Options
greater than one
less than one
equal to one
infinity
MCQ
Fill in the Blanks
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Solution
When the demand curve has the shape of rectangular hyperbola curve, the price elasticity of demand at all the points will be equal to one.
Explanation:
A rectangular hyperbola represents unitary elastic demand throughout its range. Thus, elasticity is equal to one at every point on the curve.
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