A city is thinking of raising its tax on chewing gum, which is currently at $.10 per pack, to $.21 per pack. suppose too that the price of a pack of gum (without the tax) is currently $1.00, and at the current price tax (which equals $1.10), 8000 packs of gum are sold in the city each day. (the price with the new tax will be $1.21). an economist estimates that the price elasticity of demand for gum in the city is 1.20. given this information, ____
a. the quantity of gum demanded will decrease by 800 packs per day with the new tax
b. the quantity of gum demanded will decrease by 960 packs per day with the new tax
c. the quantity of gum demanded will increase by 800 packs per day with the new tax
d. the quantity of gum demanded will increase by 960 packs per day with the new tax