A consumer buys 8 units of a good at a price of X per unit. When price rises to Rs 8 per unit, he buys 7 units. Calculate Price Elasticity of Demand through expenditure method. Comment on the shape of demand curve based on this information.
As per the expenditure approach, when with a change in price, the Total Expenditure remains unchanged, demand is unitary elastic, i.e. {{E}_{d}} = 1. The shape of demand curve will be rectangular hyperbola.