Question: Question 1 a. Would you expect the demand for cigarettes to be elastic?(i.e. a price elasticity greater than 1.) Explain briefly. b. The government wants

Question 1

a. Would you expect the demand for cigarettes to be elastic?(i.e. a price elasticity greater than 1.) Explain briefly.

b. The government wants to discourage smoking and therefore levies a tax on cigarettes. Who 'pays' the tax, consumers or producers? (Explain with the help of a diagram.)

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