Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

If the equation of a demand curve takes the form pq = e, where e is constant. If expenditure is always same and equals to e, then the demand curve will be in the shape of.

Options:

Rectangular Cyperbola

Triangular Cyperbola

Triangular Hyperbola

Rectangular Hyperbola

Correct Answer:

Rectangular Hyperbola

Explanation:

The given demand curve, pq=e, represents a rectangular hyperbola.

Explanation:

The equation pq=e can be rearranged to p=e/q or q=e/p, which is the standard form of a hyperbolic curve. This equation implies an inverse relationship between price (p) and quantity demanded (q), which is a characteristic of a hyperbolic curve.