mat will be the value of elasticity of demand (e_D) if the demand curve has a shape of rectangular hyperbole?

Correct option is B

The correct answer is: (b) |e_D| = 1.

A rectangular hyperbola represents a demand curve where the elasticity of demand is constant and equal to 1 along the entire curve.

This type of demand curve is characterized by the fact that the product of price and quantity remains constant (i.e., P × Q = constant).

• In the case of a rectangular hyperbola, the elasticity of demand (e_D) is 1 at all points on the curve, meaning the demand is unit elastic.
• Unit elasticity means that a 1% change in price results in a 1% change in quantity demanded, in the opposite direction.

Thus, for a rectangular hyperbolic demand curve, the value of |e_D| will always be 1.

Other options information:

• |e_D| = Above 0 but less than 1: This would be true for inelastic demand, not for a rectangular hyperbola.
•  |e_D| = 0: This would mean perfectly inelastic demand, which is not the case for a rectangular hyperbola.
•  |e_D| = Always remains above 1: This would be true for elastic demand, but not for a rectangular hyperbola.