What is the value of Elasticity of Demand on a rectangular hyperbola curve? Explain

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Solution

Dear student,

At every point on a rectangular hyperbola curve the value of elasticity of demand is one. This is because at every point on the rectangular hyperbola curve the percentage change in quantity demanded is equal to percentage change in price.

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

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