# Constant Price Elasticity of Demand

Constant Price Elasticity of Demand

The inverse demand function has a constant price elasticity of demand . The revenue is shown as an area in the upper quadrant and is also plotted as the height of the function in the lower quadrant. As the price falls, the revenue area decreases for inelastic demand (), remains constant for unit elastic demand (), and increases for elastic demand ().

P=A

1

ϵ

Q

ϵ

-1<ϵ<0

ϵ=-1

ϵ<-1