Asked by
Kathleen Cervantes
on Oct 26, 2024
Verified
Cigarette taxes have eliminated the wedge between the demand price for cigarettes and the supply price of cigarettes.
Cigarette Taxes
Taxes imposed on the sale of cigarettes to discourage consumption and raise government revenue, often used for public health initiatives.
Wedge
The difference between the demand price of the quantity transacted and the supply price of the quantity transacted for a good when the supply of the good is legally restricted. Often created by a quantity control, or quota.
Demand Price
The price of a given quantity at which consumers will demand that quantity.
- Understand the implications of specific taxes, such as excise taxes, on market efficiency and public welfare.
Verified Answer
SV
Learning Objectives
- Understand the implications of specific taxes, such as excise taxes, on market efficiency and public welfare.