A demand curve with unit elasticity at all prices is best described as

A demand curve with unit elasticity at all prices is best described as

• A. Unit elastic everywhere
• B. Perfectly elastic
• C. Inelastic
• D. Variable elasticity

Answer: (A)

Price elasticity of demand measures how responsive quantity demanded is to price changes. If it is unit elastic everywhere, the percent change in quantity demanded exactly matches the percent change in price in magnitude at every price level. This means the elasticity is 1 in absolute value across the whole curve, so the demand curve has a consistent, proportional responsiveness. Mathematically, a constant unit elasticity corresponds to a curve where quantity is inversely related to price (Q = a/P). At every point on that curve, a small change in price causes an equal percentage change in quantity, keeping the elasticity equal to -1 in magnitude. That’s why the best description is unit elastic everywhere. The other options describe different levels or behavior of responsiveness: perfectly elastic would imply infinite sensitivity (a horizontal curve), inelastic means less than proportional response (|E| < 1), and variable elasticity means the responsiveness changes with price rather than staying at 1.

Price elasticity of demand measures how responsive quantity demanded is to price changes. If it is unit elastic everywhere, the percent change in quantity demanded exactly matches the percent change in price in magnitude at every price level. This means the elasticity is 1 in absolute value across the whole curve, so the demand curve has a consistent, proportional responsiveness.

Mathematically, a constant unit elasticity corresponds to a curve where quantity is inversely related to price (Q = a/P). At every point on that curve, a small change in price causes an equal percentage change in quantity, keeping the elasticity equal to -1 in magnitude.

That’s why the best description is unit elastic everywhere. The other options describe different levels or behavior of responsiveness: perfectly elastic would imply infinite sensitivity (a horizontal curve), inelastic means less than proportional response (|E| < 1), and variable elasticity means the responsiveness changes with price rather than staying at 1.