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A town in New York currently has a $1.50 per unit tax on sales of cigarettes. Annually, 50,000 packs of cigarettes are sold, and so
A town in New York currently has a $1.50 per unit tax on sales of cigarettes. Annually, 50,000 packs of cigarettes are sold, and so the town collects $75 comma 000. The mayor proposes that the tax be increased to $2.50 per pack. If the mayor uses static tax analysis, he expects that the new tax revenue will be $ enter your response here. (Round your answer to the nearest dollar.) Part 2 Using dynamic tax analysis, it is likely that the tax base will increase remain the same decrease if the tax is imposed, and thus the new tax revenue will be greater than equal to less than the tax revenue based on the assumptions of static tax analysis
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