In 2018, the state of Kentucky raised the tax on cigarettes by 50 cents per pack. Holding all else constant, the effect of this tax would be to _____ in Kentucky.
A)decrease prices of cigarettes
B)increase sales of cigarettes
C)increase profits for stores selling cigarettes
D)decrease smoking of cigarettes

Question

Quizplus · Accepted Answer

When the tax on cigarettes is raised, the price of cigarettes increases, making it more expensive for consumers to purchase cigarettes. As a result, demand for cigarettes decreases, which leads to a decrease in smoking. Therefore, the correct answer is D (decrease smoking of cigarettes).

In 2018, the State of Kentucky Raised the Tax on Cigarettes