When cigarettes are taxed and sellers of cigarettes are required to pay the tax to the government,
A)the size of the cigarette market is reduced.
B)the price paid by buyers of cigarettes decreases.
C)the demand for cigarettes decreases.
D)there is a movement downward and to the right along the demand curve for cigarettes.

Question

Quizplus · Accepted Answer

When cigarettes are taxed, the cost of selling cigarettes increases, leading to higher prices for consumers and reduced quantity sold, thus reducing the size of the cigarette market.

When Cigarettes Are Taxed and Sellers of Cigarettes Are Required