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If the Price Elasticity of Demand for Cigarettes Is 0

Question 64

Multiple Choice

If the price elasticity of demand for cigarettes is 0.4,


A) The demand is very elastic.
B) A 10 percent increase in price will cause quantity demanded to fall by 40 percent.
C) The demand is very inelastic.
D) A 5 percent decrease in price will cause quantity demanded to rise by 10 percent.

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