The correct answer is Option (3) → The elasticity of demand at all points located on this demand curve is greater than 1.
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The demand curve is a rectangular hyperbola. The equation pq = e means that the product of price (p) and quantity (q) is always a constant. This is the definition of a rectangular hyperbola when plotted on a graph with price on one axis and quantity on the other. Therefore, this statement is Correct.
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The value of p times q is constant. This is directly stated in the given equation pq = e, where e is explicitly defined as a constant. Therefore, this statement is Correct.
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The elasticity of demand at all points located on this demand curve is greater than 1. For a demand curve where total expenditure (p × q) remains constant regardless of changes in price, the price elasticity of demand (PED) is always unity (equal to 1). This type of demand curve is known as unit elastic demand. Therefore, the statement that the elasticity is greater than 1 is Incorrect.
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At every point of consumption, the expenditure remains the same. Expenditure is simply Price × Quantity (p × q). Since the equation pq = e shows that this product is a constant, it means total expenditure remains the same at any point on this demand curve. Therefore, this statement is Correct.
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