[amp_mcq option1=”a rectangular hyperbola” option2=”a perpendicular” option3=”a parabola” option4=”a straight line” correct=”option4″]
The correct answer is D. A straight line.
A straight line demand curve shows elasticity equal to unity at all points. This means that the percentage change in quantity demanded is equal to the percentage change in price.
A rectangular hyperbola demand curve shows elasticity greater than unity at all points. This means that the percentage change in quantity demanded is greater than the percentage change in price.
A perpendicular demand curve shows elasticity equal to zero at all points. This means that the percentage change in quantity demanded is zero, regardless of the percentage change in price.
A parabola demand curve shows elasticity less than unity at all points. This means that the percentage change in quantity demanded is less than the percentage change in price.