What Does the Following Statement Imply About Price Elasticity of Demand

question 83

Multiple Choice

What does the following statement imply about price elasticity of demand? "Government tries to reduce cigarette consumption with an extra 50 cent tax per pack.Policy raises government revenue but fails to curb smoking."

• A)demand for cigarettes is elastic
• B)demand for cigarettes is inelastic
• C)elasticity of demand for cigarettes is equal to one
• D)elasticity of demand for cigarettes is close to infinity
• E)elasticity of demand for cigarettes equals 0.5

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Definitions:

Inflammation

The body's immune response to infection or injury, characterized by redness, heat, swelling, and pain.

Ecchymosis

A discoloration of the skin resulting from bleeding underneath, typically caused by bruising.

Leukoderma

a skin condition characterized by localized or widespread loss of pigmentation, resulting in white patches on the skin.

Keloid

A form of scar that grows excessively, often larger than the original wound, due to an overproduction of collagen.