Consider an agricultural-based economy where there are many farmers planting tobacco plants in small pieces of land using an identical farming method. The famer will harvest the tobacco leaves and sell to a large number of cigarette manufacturers as raw materials of cigarettes. The price of tobacco leave is determined by the market demand and supply and no single farmer or manufacturer can influence the price. Each farmer has no problem selling all the tobacco leaves at the market equilibrium price.

Examine the structure of the tobacco leave market and support your answers with a suitable tobacco leave market diagram and an individual farmer diagram and also examine the structure of market for an individual tobacco farmer, assuming all tobacco farmers are earning a normal profit initially. Eventually it is discovered that smoking cigarettes is linked to many diseases. Appraise the short run and the long run effects of such information on the tobacco leave market as well as the market for the individual tobacco farmer following this discovery.