A Harvard economist estimates that a doubling of enforcement efforts to block marijuana imports would raise the price (by reducing supply) by about 13 percent. Based on his estimate of the price elasticity of demand for marijuana, he expects marijuana use would fall by 26 percent. The elasticity estimate used by this economist is A. 0.4 B. 2.0 C. 3.0 D. Can't be determined
A Harvard economist estimates that a doubling of enforcement efforts to block marijuana imports would raise the price (by reducing supply) by about 13 percent. Based on his estimate of the price elasticity of demand for marijuana, he expects marijuana use would fall by 26 percent. The elasticity estimate used by this economist is A. 0.4 B. 2.0 C. 3.0 D. Can't be determined
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 6E
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A Harvard economist estimates that a doubling of enforcement efforts to block marijuana imports would raise the price (by reducing supply) by about 13 percent. Based on his estimate of the price elasticity of demand for marijuana, he expects marijuana use would fall by 26 percent. The elasticity estimate used by this economist is A. 0.4 B. 2.0 C. 3.0 D. Can't be determined
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