Suppose consumers spent $42 million on Christmas trees last year, when the average tree cost was $30. This year they spend $42 m

Question

3 years ago

15

illion, when the average tree costs $25. Assume that everything else remains constant. This data suggests that _____

1 answer:

faltersainse [42] · Answer 1 · 2021-12-29T06:21:50+03:00

Answer:

The question is incomplete

Choose one correct answer from the following;

a.the demand for trees is inelastic.

b. total revenue to tree producers rose this year.

c. consumers bought the same number of Christmas trees this year as last year.

d.the price of the Christmas trees stayed the same.

e.the demand for trees is unit elastic.

The answer is e.the demand for trees is unit elastic.

Explanation:

Price elasticity of demand =( (25-30)/30 *100)/ 1680-1400/1400 *100)=1.2