a 10% increase in cigarette prices has been found to result in a ____ decrease of smokers.\na. 2%\nb. 4%\nc…
a 10% increase in cigarette prices has been found to result in a ____ decrease of smokers.\na. 2%\nb. 4%\nc. 10%\nd. 20%\nplease select the best answer from the choices provided.
Answer
Brief Explanations:
Research in economics shows that the price - elasticity of demand for cigarettes is relatively inelastic. A 10% increase in cigarette prices typically leads to a smaller percentage decrease in the number of smokers. Empirical studies suggest that a 10% price increase results in about a 2% decrease in the quantity demanded (number of smokers).
Answer:
A. 2%