Analyze the case based on these two graphs and the theory, complements and supplements.

What is your conclusion? Raising taxes on tobacco has any impact on smoking?

Figure 4 Shifts in the Demand Curve versus Movements along the Demand Curve When warnings on cigarette packages persuade smokers to smoke less, the demand curve for cigarettes shifts to the left. In panel (a), the curve shifts from D, to D2. At a price of $5 per pack, the quantity demanded falls from 20 to 10 cigarettes per day, as reflected by the shift from point A to point B. By contrast, when a tax raises the price of cigarettes, the demand curve does not shift. Instead, there is a movement to a different point on the demand curve. In panel (b), when the price rises from $5 to $10, the quantity demanded falls from 20 to 12 cigarettes per day, as reflected by the movement from point A to point C. (a) A Shift in the Demand Curve (b) A Movement along the Demand Curve Price of Price of A policy to discourage A tax that raises the price Cigarettes, Cigarettes, per Pack smoking shifts the of cigarettes results in a per Pack demand curve to the left. movement along the $10 demand curve. 5 10- 20 12 20 Number of Cigarettes Smoked per Day Number of Cigarettes Smoked per Day