A Demand Curve That Has Constant Price Elasticity of Demand

question 149

Multiple Choice

A demand curve that has constant price elasticity of demand coefficient equals to one at all points is a(n) :

• A) rectangular hyperbola.
• B) downward-sloping straight line.
• C) upward-sloping straight line.
• D) none of the above.

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Definitions:

Evade

To avoid or escape from something or someone, often by using cunning or deceit.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied responds infinitely to changes in price.

Excise Tax

A tax charged on specific goods and services, such as tobacco and alcohol, often implemented to discourage their use or raise government revenue.

Upsloping

Typically refers to a graph line that shows an increase in a variable as another variable increases; commonly used in economics to describe supply curves.