According to studeis undertaken by the U.S. Department of Agriculture, the price elasticity of demand for cigarettes is between -0.3 and -0.4 and the income elasticity is about +0.5. Suppose congress, influenced by studies linking cigarette smoking to cancer, plans to raise the excise tax on cigarettes so the price rises by 10 percent. Estimate the effect the price increase will have on cigarette consumption and consumber spending on cigarettes (in percentage terms).

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