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    Exam 6: Government Actions in Markets
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    Suppose the Government Wants to Discourage the Use of Cigarettes
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Suppose the Government Wants to Discourage the Use of Cigarettes

Question 64

Question 64

Multiple Choice

Suppose the government wants to discourage the use of cigarettes. If it imposes a tax on cigarettes, the equilibrium quantity falls the most when the elasticity of demand equals


A) 2.00.
B) 1.00.
C) 0.50.
D) 0.

Correct Answer:

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