Buy custom The Effects of Cigarette Taxation
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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 759 |
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In other words, the amount of the excise tax in Arizona has hit a point to where every increase in the price in cigarettes, you will realize a decrease in demand equivalent to the increase.
If for some reason Arizonans wanted to protect the consumer from a price too high, the legislature could enact a price ceiling on a pack of cigarettes...
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The price ceiling, in conjunction with the high excise taxes, could force the price ceiling to become binding, causing the tobacco companies to narrow their margins since they would be prohibited from reaching the equilibrium price point due to the price ceiling, and supply will decrease and demand increase as a result...
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