Two columns are given- Column I and Column II , each having some statements. Match statements in column I to that in column II.
| List I | List II | ||
| i | Horizontal demand curve | a | Infinity price elasticity |
| ii | Vertical demand curve | b | Zero price elasticity |
| iii | Linear demand curve sloping downwards from left to right | c | Elasticity Varies |
| iv | Rectangular hyperbola shaped demand curve | d | Unit price elasticity |
Answer & explanation
Correct answer: option 1
Horizontal demand curve - where market price remains constant at P , whatever be the level of demand for the commodity. At any other price, quantity demanded drops to zero and therefore elasticity = infinity . A horizontal demand curve is perfectly elastic.
Vertical demand curve - Whatever be the price, the demand is given at the level q . A price never leads to a change in the demand for such a demand curve and |eD| is always 0. Therefore, a vertical demand curve is perfectly inelastic.
The elasticity of demand is different at different points on a linear demand curve. At p = 0, the elasticity is 0, at q = 0, elasticity is infinity etc.
Demand curve which has the shape of a rectangular hyperbola - this demand curve has a property that a percentage change in price along the demand curve always leads to equal percentage change in quantity. Therefore, |eD| = 1 (Unitary elastic) at every point on this demand curve.