A demand curve Q = A/p, where A is a positive constant, has the property that the elasticity of demand is ε = -1. Accurately draw this demand curve. Now pick two different prices and show the associated revenue for each. (Draw a line from a given price on the vertical axis horizontally to the demand curve, then draw a vertical line that hits the horizontal axis. The resulting rectangle is the revenue: its height is price and its length is quantity, so the area is p × q = R.)
How do the two rectangles compare in size? Now do the same exercise with a linear demand curve and compare the size of the rectangles at two different prices.