Posted by G on .
I am cramming for an examine. I can not locate one of my graded lessons with all my notes. I am trying to redo the equaitons. I am really stuck on how to simplify this one.
Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently costs $2 and the govenment wants to reduce smoking by 20 percent, by how much should the government increase the price?
The teacher wrote this out for the answer. I am not clear on how it is simplified to come down to the answer on 3.33