Question
In 2016 12.5 billion packs of 20 cigarettes were sold in the United States at an average price of $8.00 a pack.Economic studies have found
In 2016 12.5 billion packs of 20 cigarettes were sold in the United States at an average price of $8.00 a pack.Economic studies have found that a 10% increase in cigarette prices causes about a 5% decrease in cigarette consumption.Smoking-related illness in the United States cost more than $300 billion each year.The government wants to reduce smoking as much as possible.What would have a greater impact on reducing cigarette consumption: a) increasing tax on cigarettes by $3.00 per pack or b) placing a quota of 10 billion packs per year on the production of cigarettes?Why? (2 points)
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