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Consider the following two policies aimed at reducing cigarette smoking in Australia: (i) A tax on the suppliers of cigarettes, and (ii) Public health campaign

Consider the following two policies aimed at reducing cigarette smoking in Australia:

(i) A tax on the suppliers of cigarettes, and (ii) Public health campaign initiatives.

Illustrate both of these policies separately using a fully labelled and explained demand and supply diagram for each of parts (i) and (ii). Do not use actual numbers, it is only theoretical.

Compare and contrast the impact on equilibrium price and quantity of cigarettes of each of these policies, explaining your answer with reference to the diagrams.

Consider the impact of each policy on government revenue. Explain your answer.

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