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If the Elasticity of Demand for Cigarettes Is 0

Question 105

Multiple Choice

If the elasticity of demand for cigarettes is 0.4,a seller should


A) Increase price to increase total revenue.
B) Decrease price to increase total revenue.
C) Reduce price to maximize profits.
D) Increase price because the percentage change in quantity demanded will be greater than the price effect.

Correct Answer:

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