The U.S. Tobacco Settlement between the major tobacco companies and 46 states caused the price of cigarettes to jump 45Cent (21%) in November 1998. Levy and Meara (2005) found only a 2.65% drop in prenatal smoking 15 months later. What is the elasticity of demand for this group? Would I take -2.65% and divide that by 21%?
The U.S. Tobacco Settlement between the major tobacco companies and 46 states caused the price of cigarettes to jump 45Cent (21%) in November 1998. Levy and Meara (2005) found only a 2.65% drop in prenatal smoking 15 months later. What is the elasticity of demand for this group? Would I take -2.65% and divide that by 21%?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 6E
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Hello! The questions is as follows:
The U.S. Tobacco Settlement between the major tobacco companies and 46 states caused the price of cigarettes to jump 45Cent (21%) in November 1998.
Levy and Meara (2005) found only a 2.65% drop in prenatal smoking 15 months later. What is the elasticity of
Would I take -2.65% and divide that by 21%? Thanks in advance!
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