1. The Centers for Disease Control and Prevention (CDC) estimates that cigarette smoking causes more than 480,000 deaths each year in the United States. Cigarette smoking also carries a significant financial burden with an estimated $170 billion of direct medical expenses and another $156 billion resulting from lost productivity from workers annually. If market demand and supply for cigarettes in the United States is as shown in the accompanying graph, consider the government's options if it wants to reduce cigarettes consumption to 200 billion packs per year.

Price ($ per pack) Supply $12 $11 $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 Demand 0 40 80 120 160 200 240 280 320 360 400 440 480 Quantity of cigarettes (billions of packs)