1. A small country imports cigarettes. Identical cigarettes are also produced inside your country in a perfectly competitive industry. The Government wishes to reduce the consumption of cigarettes. Is an import tax on cigarettes the best way to reduce cigarette consumption? Why (not)? What would you recommend instead?

Answer rating: 100% (QA)

Implementing an import tax on cigarettes could indeed reduce consumption to some extent as it increa... View the full answer