In 1999, Governor Glendening of Maryland proposed an increase of $1 per package in Maryland's cigarette tax, which would increase the price per pack of cigarettes from $2

Economics Jan 19, 2021

In 1999, Governor Glendening of Maryland proposed an increase of $1 per package in Maryland's cigarette tax, which would increase the price per pack of cigarettes from $2.55 to $3.55. An estimate of the own-price elasticity of demand for cigarettes in Maryland at the time was -0.4. How much would the quantity demanded for cigarettes decline as a result of the price increase? (Use $2.55 as the base price.)

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