GreenTree Corporation sells live Christmas trees.It observes that when it decreases the price of Christmas trees by 10%,revenue rises by 25%.The demand for Christmas trees must be

Question

Quizplus · Accepted Answer

When a decrease in price leads to an increase in revenue, demand is elastic. This is because the percentage increase in quantity demanded is greater than the percentage decrease in price, resulting in a net gain in revenue. In this case, the 10% price decrease led to a 25% increase in revenue, indicating elastic demand.

GreenTree Corporation Sells Live Christmas Trees