The Constant Elasticity of Demand for Cigarettes Has Been Estimated

question 81

Multiple Choice

The constant elasticity of demand for cigarettes has been estimated to be 0.5.To reduce smoking by 25%, approximately how much tax needs to be added to a $1 pack?

• A)$.50.
• B)$.75.
• C)$.25.
• D)$.13.
• E)$4.

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