Economics · May / June 2026 · Paper 12 · Question 7
2281Price elasticity of demand (PED)
The elasticity of demand for cigarettes is estimated to be −0.5. The government introduces a tax on cigarettes to reduce consumption. By how much must the price of cigarettes rise to reduce consumption by 10%?
- A5%
- B10%
- C15%
- D20%
As printed in the paper
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Correct answer: D. 20%
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