Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the tax is shared by consumers and producers the following way:
A)30% paid by the consumers and 70% paid by the producers.
B)100% paid by the producers.
C)100% paid by the consumers.
D)50% paid by the consumers and 50% paid by the producers.

Question

Quizplus · Accepted Answer

The Answer is D

Suppose the Market Demand for Cigarettes Is: D=10- P, and the Supply