Estimated the price elasticity for cigarettes

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Reference no: EM1362128

It has been estimated that the price elasticity for cigarettes is 0.164. Assuming there are currently no taxes on cigarettes, to reduce cigarette purchases 5%, government would need to tax cigarettes enough to:

A) raise the price by 30.5%.

B) raise the price by 0.82%.

C) lower the price by 30.5%.

D) lower the price by 0.82%.

Reference no: EM1362128

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