The demand for cigarettes, which create negative externalities through secondhand smoke, is often relatively inelastic. That is,

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The demand for cigarettes, which create negative externalities through secondhand smoke, is often relatively inelastic. That is, when the price of cigarettes changes, the quantity demanded changes by a smaller portion. Using this fact, explain to what extent you think a tax on cigarettes would fulfill each of the goals of taxation.
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Microeconomics

ISBN: 978-1259163531

1st edition

Authors: Dean Karlan, Jonathan Morduch

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