The possibility of the application of rectangular hyperbola, or for that matter, any hyperbola in economics is remote. Mathematical equations representing economic relationship among economic variables would normally have one to one correspondence and all such curves would be meaningfully defined in the first quadrant ( all non-negative values of the two economic variables. Hyperbolas look different.
It is quite possible to think of a demand curve which is somewhat parabola shaped with assymptotes: quantity of demand rising with price declining upto a certain low price after which demand becomes perfectly elastic. For example, the demand for speculative money becomes infinite at a certain low interest rate (liquidity trap region)..Anothe example could be the labor supply curve rising upwards and then becoming nearly completely inelastic at very high wage rates.
But hyperbola to represent demand or supply curves is impossible.
However, there coukld be possuibility of the paths of dynamic adjustment in disequilibrium situations arising out of departure from unstable equilibrium to be depicted by hyperbolic curves.
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The possibility of the application of rectangular hyperbola, or for that matter, any hyperbola in economics is remote. Mathematical equations representing economic relationship among economic variables would normally have one to one correspondence and all such curves would be meaningfully defined in the first quadrant ( all non-negative values of the two economic variables. Hyperbolas look different.
It is quite possible to think of a demand curve which is somewhat parabola shaped with assymptotes: quantity of demand rising with price declining upto a certain low price after which demand becomes perfectly elastic. For example, the demand for speculative money becomes infinite at a certain low interest rate (liquidity trap region)..Anothe example could be the labor supply curve rising upwards and then becoming nearly completely inelastic at very high wage rates.
But hyperbola to represent demand or supply curves is impossible.
However, there coukld be possuibility of the paths of dynamic adjustment in disequilibrium situations arising out of departure from unstable equilibrium to be depicted by hyperbolic curves.
Rectangular Hyperbola Demand Curve
if it's rectangular that means it's flat....the economy is flat. There is no movement within to give it a curve.
is it really that curved?