Consider public policy aimed at smoking.

a$.$ Studies indicate that the price elasticity of demand for cigarettes is about $0\mathrm{.}4.$

If a pack of cigarettes currently costs $$4$ and the government wants to reduce smoking by $20$ per cent, by how much should it increase the price? Show your calculations.

$$If the government permanenty increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now?

$$Studies find that teenagers have a higher price elasticity than adults. Why might this be true?