Multiple Choice
What does the following statement imply about price elasticity of demand? "Government tries to reduce cigarette consumption with an extra 50 cent tax per pack.Policy raises government revenue but fails to curb smoking."
A) demand for cigarettes is elastic
B) demand for cigarettes is inelastic
C) elasticity of demand for cigarettes is equal to one
D) elasticity of demand for cigarettes is close to infinity
E) elasticity of demand for cigarettes equals 0.5
Correct Answer:
Verified
Correct Answer:
Verified
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