Well, it means that the demand curve (units demanded as a function of price) is proportional to 1/price for a large range. That seems pretty unusual, since the general idea of price elasticity is compatible with any curve decreasing with price, i.e. 1/price^2, 1/sqrt(price), 1/e^price, etc.
Thank you; you're right. It's not surprising that there is some relationship, but what is actually surprising is that the relationship would so closely match an idealized, particular relationship (unitary elastic demand). (And this should have been obvious to me, since the general use of the demand curve is not, by any means, to prove to people that the price they choose doesn't matter.) I'd edit my original post if I were still within the edit window.
Comments
Well, it means that the demand curve (units demanded as a function of price) is proportional to 1/price for a large range. That seems pretty unusual, since the general idea of price elasticity is compatible with any curve decreasing with price, i.e. 1/price^2, 1/sqrt(price), 1/e^price, etc.
Thank you; you're right. It's not surprising that there is some relationship, but what is actually surprising is that the relationship would so closely match an idealized, particular relationship (unitary elastic demand). (And this should have been obvious to me, since the general use of the demand curve is not, by any means, to prove to people that the price they choose doesn't matter.) I'd edit my original post if I were still within the edit window.