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Suppose that the government has a goal to reduce the demand for cigarettes in support of a health program. Given this, the government decided to
Suppose that the government has a goal to reduce the demand for cigarettes in support of a health program. Given this, the government decided to impose a per-unit tax of 40 centavos per pack that is levied on the sellers or placed on the sale of cigarettes by the government. This causes a shift of the market supply of cigarettes from S to S' as shown. Price ($ per pack) 1.60+ 1.504 1.40 + 1.30
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