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0,00 points Assume the market demand for cigarettes depicted in

Question : 0,00 points Assume the market demand for cigarettes depicted in : 2472

0,00 points Assume the market demand for cigarettes is depicted in the table below Price per pack Quantity demanded (millions of packs per year) 2 4 6 8 10 12 14 16

(a) If cigarettes are priced at $6 a pack, how many packs will smokers buy? Instructions: Enter your response rounded to the nearest whole number. million packs per year

(b) Assume cigarettes are still priced at $6 a pack. If secondhand smoke creates $2 of harm per pack, what is the optimal rate of smoking? Instructions: Enter your response rounded to the nearest whole number. million packs per year

(c) How large a tax is needed to achieve this outcome?

 

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Economics 2 Years Ago 319 Views
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