Explore BrainMass
Share

Explore BrainMass

    demand for cigarettes

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Suppose that the price elasticity of demand for cigarettes is 0.46 in the short run and 1.89 in the long run, the income elasticity of demand for cigarettes is 0.50, and the cross-price elasticity of demand between cigarettes and alcohol is -0.70. Suppose also that the price of cigarettes, the income of consumers, and the price of alcohol all increase by 10 percent. Calculate by how much the demand for cigarettes will change? (a) in the short run (b) in the long run.

    © BrainMass Inc. brainmass.com October 10, 2019, 12:21 am ad1c9bdddf
    https://brainmass.com/economics/short-and-long-run-cost-functions/demand-for-cigarettes-288667

    Solution Summary

    Within this case, calculate by how much the demand for cigarettes will change? (a) in the short run (b) in the long run.

    $2.19