A shop produces and sells 100 luxury baskets a day at £80 each. When it cut the price to £64 it increased
its sale to 116 baskets a day. Which of the following statements is correct?
a. The demand for the baskets is elastic.
b. The elasticity of demand is approximately 1.25
c. The marginal revenue is greater than zero.
d. He shop should raise its price in order to increase profits
