Cigarettes are highly addictive and therefore have a very low elasticity of demand. A 52.00 increase in the national sales tax on cigarettes would likely cause the price paid by buyers of cigarettes to
a. increase by more than $1.00 but less than $2.00.
b. increase by less than $1.00
c. increase by more than $2.00.
d. remain unchanged.
e, increase by $2.00.

Q&A Education