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Suppose the Price Elasticity of Teenagers' Demand for Cigarettes Is

Question 457

Multiple Choice

Suppose the price elasticity of teenagers' demand for cigarettes is 2.0. If the government imposes a tax on cigarettes that raises the price by 10 percent, by how much will it reduce teenaged smoking?


A) by 5 percent
B) by 10 percent
C) by 15 percent
D) by 20 percent

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