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In case of quantity, there will be a reduction in the quantity demanded. Later some smokers that cannot afford the current brands and cannot stop smoking will change over to lower priced brands. However, the net effect will be that there will be a reduction in demand for cigarettes (Courier Post Online, 2007)...
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However, the net effect will be that there will be a reduction in demand for cigarettes (Courier Post Online, 2007).
In this market, if a hypothetical floor were imposed, then there would be a reduction in smoking as several smokers would not be able to afford the prices imposed by the government. The quantity of cigarettes demanded would fall and the factors of production employed in making of cigarettes would be reduced...
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