Business, 29.06.2021 16:00 marianabeel230

2. Rice in the price of cigarettes from US $6 to US $9 is found to cause demand to contract from 200,000 to 140,000 a day in an island country.
a. Calculate the price elasticity of demand of cigarettes on the island.
b. Is the demand elastic or inelastic?
c. Explain one reason for the degree of elasticity you have found.
d. Would taxing cigarettes be more effective in reducing smoking or raising tax revenue? Explain
your answer

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2. Rice in the price of cigarettes from US $6 to US $9 is found to cause demand to contract from 20...