Final answer:
To calculate the quantity of fewer packs of cigarettes demanded at a higher price, we need to use the concept of price elasticity of demand. We can calculate it using the formula: Price Elasticity of Demand = Percentage Change in Quantity Demanded / Percentage Change in Price.
Step-by-step explanation:
In order to calculate the quantity of fewer packs of cigarettes demanded at a higher price, we need to use the concept of price elasticity of demand. Price elasticity of demand measures how responsive the quantity demanded is to a change in price.
To calculate how many fewer packs of cigarettes will be demanded, we can use the following formula:
Price Elasticity of Demand = Percentage Change in Quantity Demanded / Percentage Change in Price
Once we have the price elasticity of demand, we can determine whether the demand for cigarettes is elastic or inelastic.
If the demand is inelastic, there will be fewer packs of cigarettes demanded at a higher price. If the demand is elastic, the decrease in quantity demanded will be even greater.