Critical Reasoning (CR) | Re: In the past, every ten-percentage-point increase in cigarette prices

Understanding the argument -
In the past, every ten-percentage-point increase in cigarette prices in the country of Coponia has decreased per capita sales of cigarettes by four percent. - Fact. It means if in the year 2021, the price was raised by 10%, the sales were X units, and if we raise the price in 2022 by 20% (10 percentage points more) vis-a-vis 2021, the sales becomes 0.96X.
Coponia is about to raise taxes on cigarettes by 9 cents per pack. Fact
The average cigarette price in Coponia has been for more than a year, 90 cents per pack. Fact. Take two scenarios. Say in scenario 1 it's 91 cents, and in scenario 2, it's 180 cents. So if we correlate the earlier statement, the 9 cents raise in taxes seems like 10%, but if we compare it with scenario 2 it's 5%. I just shared two scenarios to highlight that the author has used 90 to confuse concerning the ten percentage point number. So, be mindful of the trap.
So, the tax hike stands an excellent chance of reducing per capita sales
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Statistics : Posted by Raman109 • on 16 Jun 2008, 17:34 • Replies 35 • Views 53832

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