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Leone argues that closing the loophole would essentially amount to a back-door tax of an additional 67 cents a pack, or a 400 percent increase, on those tobacco companies

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17 Elasticity and Pricing Learning Objectives By the end of this section, you will be able to: Analyze how price elasticities impact revenue Evaluate how elasticity can cause shifts in demand and supply Predict how long-run and short-run impacts of elasticity affect equilibrium Explain how the elasticity of demand and supply determine the incidence of a tax on buyers and sellers Studying elasticities is useful for a number of reasons, pricing being most important