Question

A study found that, among addicted smokers, a 10 percent increase in the price of cigarettes resulted in a 2 percent decrease in quantity demanded. for these consumers, cigarettes have a(n) ________________ price elasticity demand.

Answer 1

For these consumers, cigarette have an INELASTIC price elasticity demand. In Economic, a product is said to have an inelastic price elasticity demand if the percentage change in demand is less than the percentage increase in the price of that product. The value of the price inelastic demand usually falls between zero and one.