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The State of Ohio has proposed a per unit sales tax on cigarettes. Your group has been hired to analyze the impacts of the proposed
The State of Ohio has proposed a per unit sales tax on cigarettes. Your group has been hired to analyze the impacts of the proposed tax on cigarette sellers on whom the tax is levied directly and consumers, both young new smokers and older established smokers. You have evidence that new smokers have an elasticity of demand for cigarettes of -2, while old smokers have an elasticity of -0.3. Could you please explain in detail? Thanks
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