According to a study by the U.S. Centers for Disease Control and Prevention, the price elasticity of demand for cigarettes is - 0.25. Americans purchase about 360 billion cigarettes each year. Sources: "Response to Increases in Cigarette Prices by Race/Ethnicity, Income, and Age Groups-United States, 1976-1993," Morbidity and Mortality Weekly Report, July 31, 1998; and Henry Saffer, et al., "E-Cigarettes and Adult Smoking," National Bureau of Economic Research Working Paper 24212, revised April 2018. a. If the federal tax on cigarettes were increased enough to raise the price of cigarettes by 40 percent, the quantity of cigarettes demanded would by billion per year (enter your numeric response rounded to the nearest whole number). b. A recent study by Henry Saffer of City University of New York and colleagues estimated that the price elasticity of demand for electronic cigarettes (e-cigarettes) is - 1.27. Why might the price elasticity of demand be higher for e-cigarettes than for conventional cigarettes? Because e-cigarettes have been recently introduced to the market and are likely to be addictive, the demand for them is price elastic. Is a tax increase of the same percentage more likely to reduce smoking of conventional cigarettes or of e-cigarettes? Briefly explain. If e-cigarettes have elastic demand, a tax that raises the price of e-cigarettes will result in a larger decrease in the quantity of e-cigarettes demanded compared to the effect of a similar tax on conventional cigarettes