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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.
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."
elasticity of demand for cigarettes equals 0.5
demand for cigarettes is elastic
demand for cigarettes is inelastic
elasticity of demand for cigarettes is equal to one
elasticity of demand for cigarettes is close to infinity
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