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Scenario 2: A country, which does not tax cigarettes, is considering the introduction of a $0.40 per pack tax. The economic advisors to the country
Scenario 2: A country, which does not tax cigarettes, is considering the introduction of a $0.40 per pack tax. The economic advisors to the country estimate the supply and demand curves for cigarettes as: QD = 140,000 - 25,000 PB Qs = 20,000 + 75,000 PS GD = Q s where Q = daily sales in packs of cigarettes, and P = price per pack. PB - PS = 0. 40
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