What would happen to the equilibrium price and quantity for the market for cigarettes if the government increased the tax and a scientific study came out confirming that smoking cigarettes increased the rate of heart disease?

Question

Quizplus · Accepted Answer

The government increasing the tax on cigarettes would likely lead to a higher price for consumers, decreasing demand. The scientific study would also decrease demand by discouraging smoking. Both factors would decrease the quantity demanded. The price effect is indeterminate because the tax could push the price up, but decreased demand could pull it down.

What Would Happen to the Equilibrium Price and Quantity for the Market