Elasticity. At the current price of cigarettes at P25 per pack, current consumption was determined to be 50,000 packs per month. The producers are contemplating an increase in the price of P3 per pack, but they are apprehensive that consumption might drastically fall. An economist knows that such price increase would reduce consumption by 20%. c. Compute for the arc elasticity of demand for cigarettes between the given pints. d. Should the producers push though with their contemplated action or not? Why?

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