Technological Innovations

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Written by:

Allen V


Date added:

July 1, 2017








No of pages / words:

2 / 413


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Proposed tax will cause an increase in total price for cigarette pack, however, because cigarettes are an addictive substance, demand won't fall significantly. Individuals will decrease consumption of cigarettes, some night even give up smoking, but majority will continue to buy cigarettes even at higher prices, as there are not many substitutive products for cigarettes...
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Therefore, when the price of cigarettes is increased via a tax, the intended effects are anticipated easily: consumer demand for cigarettes will decrease, although not as much as one might expect due to inelastic demand for cigarettes and already reduced cigarette consumption over the last 2 years. Governmental revenues from the cigarette sales will increase and will bring some stability, however, the amount of the gain won’t be significant and worth the tax imposition...
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