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If the Elasticity of Demand for Cigarettes Is 0

Question 24

Multiple Choice

If the elasticity of demand for cigarettes is 0.4, then an increase in the price of a pack of cigarettes from $1.00 to $1.30 would reduce quantities demanded by about


A) 27 percent.
B) 40 percent.
C) 12 percent.
D) 95 percent.

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