posted by ak on .
List the types of potential segmenting dimensions, and explain which you could try to apply first, second and third in a particular situation. If the of nature of the situation would affect your answer. Explain why
The price elasticity of demand for cigarettes is estimated to be (-.4) and the income elasticity is about (+5).
a- Suppose the government impose a tax on cigarettes so the price rises by 10%. Estimate the effect this price increase will have on cigarettes consumption and consumer spending on cigarettes. (both in percentage terms)