Question

Elasticity of demand is different at different points of a demand curve, unless demand curve is a rectangular hyperbola.

• A. True
• B. False

Answer 1

The correct option is A

True

If the demand curve is a rectangular hyperbola, then at any point on the curve, the product of price and quantity i.e. total expenditure is a constant.

Hence, a percentage change in P causes the same percentage change in Q and hence, the elasticity would be 1 always.