Which of the following statements is TRUE regarding cigarette taxes?
A) Cigarette manufacturers bear almost all of the cigarette taxes.
B) Cigarette manufacturers tend to ship their product from low-tax states to high-tax states.
C) The elasticity of cigarette supply in all states is very small so cigarette manufacturers receive higher after-tax prices in higher-tax states.
D) After-tax prices received by cigarette manufacturers are about the same in all states.

Question

Quizplus · Accepted Answer

Cigarette manufacturers typically receive about the same after-tax prices in all states because the tax burden is largely passed on to consumers, not the manufacturers.

Which of the Following Statements Is TRUE Regarding Cigarette Taxes