What is a rectangular hyperbola in economics?
Rectangular hyperbola is a curve under which all rectangular areas are equal. When the elasticity of demand is equal to unity (ed = 1) at all points of demand curve, then the demand curve is rectangular hyperbola.
What does it mean when a demand curve is a rectangular hyperbola?
Solution: The demand curve is a rectangular hyperbola, it shows that elasticity of demand is equal to unity at all points of demand curve.
What is a rectangular hyperbola formula?
The equation of a rectangular hyperbola is x2 – y2 = a2, where ‘a’ is the length of the semi-major axis of the hyperbola. Here in a rectangular hyperbola both the transverse axes and the conjugate axes are of equal length.
What is a rectangular hyperbolic curve?
The rectangular hyperbola is the hyperbola for which the axes (or asymptotes) are perpendicular, or with eccentricity . It is to general hyperbolas what the circle is to ellipses.
Why indifference curve is a rectangular hyperbola?
Rectangular Hyperbola (also known as equilateral hyperbolas or right hyperbolas) are ‘C’-shaped curves. In these curves, the vertical and the horizontal portions (of the curves) get closer to the y-axis and x-axis as we move vertically upwards and horizontally rightwards.
Why AFC is rectangular hyperbola?
AFC curve is rectangular hyperbola because total fixed cost TFC remains constant at all points of AFC i.e. the multiplication between AFC and production quantity at all points of AFC remains constant. It is the reason why AFC declines when production quantity increase.
Which curve has a shaped like rectangular hyperbola?
AFC curve
The AFC curve is of the shape of rectangular hyperbola.
Is a rectangular hyperbola a function?
Rectangular hyperbola: This rectangular hyperbola has its center at the origin, and is also the graph of the function f(x)=1x f ( x ) = 1 x .
What is the difference between hyperbola and rectangular hyperbola?
What is the difference between? Rectangular hyperbola is a special type of hyperbola in which it’s asymptotes are perpendicular to each other. (x2/a2) – (y2/b2) = 1 is the general form of hyperbolas, while a=b for rectangular hyperbolas, i.e: x2 – y2 = a2.
Which curve has a shape like rectangular hyperbola?
The AFC curve
Why is unitary elastic demand curve a rectangular hyperbola?
When percentage change in the quantity demanded is equal to percentage change in price, then demand for such a commodity is said to be unitary elastic. In this case, Ed = 1 and the demand curve is a rectangular hyperbola. Rectangular hyperbola is a curve under which the total area at all points will be the same.