Whythepriceofcigaretteshasrisenandhowataxcouldreducethenumberofcigarettessoldinthemarket?(

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David · Accepted Answer

Why the price of cigarettes has risen and how a tax could reduce the number of cigarette sold in 
the market? 
Answer: 
The graph below shows the equilibrium in market for cigarettes. The equilibrium is determined at point 
where market demand equals market supply. Graphically it is the situation where market demand curve 
intersects market supply curve. [Refer figure1] 
Figure1:
There could be many reasons for rise in the price of cigarettes; 
1. Increase in demand;

Whythepriceofcigaretteshasrisenandhowataxcouldreducethenumberofcigarettessoldinthemarket?(

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