I'm trying to work on the following question but I'm not sure how exactly to do it.
If the elasticity of aggregate cigarette demand with respect to advertising were 0.15, by extrapolation, what is the effect of each of the following on cigarette consumption:
a)10% reduction in advertising?
b)50% reduction in advertising?
c)Ban on cigarette advertising (basically 100% reduction in advertising)?
Any help would be appreciated.
If the elasticity of aggregate cigarette demand with respect to advertising were 0.15, by extrapolation, what is the effect of each of the following on cigarette consumption:
a)10% reduction in advertising?
b)50% reduction in advertising?
c)Ban on cigarette advertising (basically 100% reduction in advertising)?
Any help would be appreciated.