Practicing Success
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. |
Rectangular Cyperbola Triangular Cyperbola Triangular Hyperbola Rectangular Hyperbola |
Rectangular Hyperbola |
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. |