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The Demand for Tobacco Is Price Inelastic

question 10

Essay

The demand for tobacco is price inelastic. Suppose there is a drought that destroys a large portion of the tobacco crop. What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so, how? What will happen to the total revenue earned by tobacco farmers?


Definitions:

Strike-Slip Fault

A type of fault where the movement of the Earth's crust is primarily horizontal, parallel to the fault line.

Thrust Fault

A type of fault where rock strata are pushed upwards on one side due to compressional forces.

Normal Fault

A type of fault where the hanging wall slides downward relative to the footwall due to tensile stress in the Earth's crust.

Strike-Slip Fault

A type of fault in which two blocks of the Earth's crust slide past each other horizontally along the fault plane.

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