• Card 2 / 10: Why is the demand curve with constant unitary elasticity concave?

    Answer:
    The demand curve with constant unitary elasticity is concave because at high prices, a one percent decrease in price results in more than a one percent increase in quantity. As we move down the demand curve, price drops and the one percent decrease in price causes less than a one percent increase in quantity.

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Microeconomics 05 Elasticity

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Attribution:  Microeconomics, OpenStax-CNX Web site. Download for free at http://cnx.org/content/col11613/latest
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