If the Elasticity of Demand for Cigarettes Is 0

question 238

Multiple Choice

If the elasticity of demand for cigarettes is 0.75 and the elasticity of supply for cigarettes is 1.25, then a 5 percent decrease in the demand for cigarettes would cause the price of cigarettes to:

• A) increase by 2.5 percent.
• B) increase by 5 percent.
• C) decrease by 2.5 percent.
• D) decrease by 5 percent.

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Definitions:

Bloodstream

The flowing blood within the circulatory system of the body, carrying oxygen, nutrients, and waste materials.

Epinephrine

A hormone and a neurotransmitter also known as adrenaline, which is released in response to stress and works by increasing heart rate, contracting blood vessels, and dilating air passages.

Bloodstream

The flowing body fluid that carries oxygen, nutrients, and waste products to and away from cells within an organism, primarily consisting of plasma, red and white blood cells, and platelets.

Accelerate Heartbeat

The increase in the speed of the heart rate.