work point 4.4

1. 10%increase in price

¤p=+10%

Adult demand change=-4%

youth demanded=-13%

Youth -> 13/10= 1.3 ped elastic

Adult-> -4/10=0.4-> PED

2, Adults have a large income and inalstic have a more steady habits youth are more likely to have less money which they are likely to spend on other goods.

3. Govenrments would tax cigarettes because they are demerit goods and not good for the population. the government can also make alot of revenue from the taxes