Question: In 2008 New York State increased its tax on cigarettes
In 2008, New York State increased its tax on cigarettes by $ 1.25 per pack. One commentator noted that “ most cigarettes sold [ in New York] will actually be trucked up from Virginia or shipped from China, by ‘ butt-leggers’ who can make over $ 1 million on each tractor- trailer load of smuggled smokes” [Fleenor, 2008]. Use Figure 16.5 to show how this behavior could have been predicted.
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