6 . Problems and Applications Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, It should increase the price by If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. O Teenagers do not have as much income as adults, so they are more price sensitive. Adults are more likely to be addicted to cigarettes. ) It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes