Assume the Price Elasticity of Demand for Tobacco Is 0

question 296

Essay

Assume the price elasticity of demand for tobacco is 0.5 and the income elasticity of demand for tobacco is 0.4.Then:
A.an increase in the price of tobacco will decrease total revenue from sales of tobacco.
B.a 20% increase in the price of tobacco will decrease the quantity demanded of tobacco by 8%.
C.tobacco is an inferior good.
D.a 50% increase in income will increase the quantity demanded of tobacco by 20%.

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