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Test practice questions

1) You are an investment analyst. The retail market that you have been investing in, tobacco, has been hit by an increase in sales taxes that are levied on tobacco sellers. Assume that the price elasticity of demand for tobacco is close to zero, while the supply elasticity is very high.

Using a diagram, explain whether you would be prepared to continue investing in the tobacco market, if market revenue is your main consideration.

Reference no: EM131213251

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