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Business, 27.05.2020 23:10 perezsamantha3oqr0za
A study reported that a 10% increase in the price of cigarettes would reduce consumption by 4% in the short-run and by 7.5% in the long-run. Use this information to calculate the price elasticity of demand for cigarettes in both the short-run and the long-run. Based on these estimates, what happens to the price elasticity of demand for cigarettes as more time elapses since the change in price? Briefly explain why this may happen.
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