Price (per pack) 11 10 9 8 3 2 1 0 2 4 6 8 10 12 14 16 18 20 Quantity (millions of packs per year) DM DS If cigarettes are priced at $3 a pack. Instructions: Enter your responses as a whole number. a. what is the quantity demanded in the market? million packs per year b. what is the socially optimal quantity? million packs per year c. If the government were to intervene and tax cigarettes, how large of a tax is needed per pack to achieve this optimal outcome?
Price (per pack) 11 10 9 8 3 2 1 0 2 4 6 8 10 12 14 16 18 20 Quantity (millions of packs per year) DM DS If cigarettes are priced at $3 a pack. Instructions: Enter your responses as a whole number. a. what is the quantity demanded in the market? million packs per year b. what is the socially optimal quantity? million packs per year c. If the government were to intervene and tax cigarettes, how large of a tax is needed per pack to achieve this optimal outcome?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![### Economic Analysis of Cigarettes
#### Graph Explanation:
The graph presented shows the relationship between the price (in dollars per pack) and the quantity (in millions of packs per year) of cigarettes. Two demand curves are plotted:
- **DM (Demand Market)**: Illustrated by green points and a solid green line.
- **DS (Demand Social Optimal)**: Illustrated by red points and a solid red line.
The vertical axis represents the price per pack, ranging from $0 to $11, while the horizontal axis shows the quantity in millions of packs per year, ranging from 0 to 20 million packs.
#### Interactive Questions:
If cigarettes are priced at $3 per pack, please answer the following questions. Enter your responses as a whole number.
a. **What is the quantity demanded in the market?**
- **[Blank for Response]** million packs per year
b. **What is the socially optimal quantity?**
- **[Blank for Response]** million packs per year
c. **If the government were to intervene and tax cigarettes, how large of a tax is needed per pack to achieve this optimal outcome?**
- **[Blank for Response]**
The graph and questions encourage a detailed understanding of the demand and social optimization regarding cigarette consumption and the potential impact of governmental taxation on achieving the socially optimal consumption level.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7c47eb58-11c8-4f3d-a446-35857f47e26f%2F5477a8fd-50c6-4afe-a499-540cdd43805d%2F6xlsfb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Economic Analysis of Cigarettes
#### Graph Explanation:
The graph presented shows the relationship between the price (in dollars per pack) and the quantity (in millions of packs per year) of cigarettes. Two demand curves are plotted:
- **DM (Demand Market)**: Illustrated by green points and a solid green line.
- **DS (Demand Social Optimal)**: Illustrated by red points and a solid red line.
The vertical axis represents the price per pack, ranging from $0 to $11, while the horizontal axis shows the quantity in millions of packs per year, ranging from 0 to 20 million packs.
#### Interactive Questions:
If cigarettes are priced at $3 per pack, please answer the following questions. Enter your responses as a whole number.
a. **What is the quantity demanded in the market?**
- **[Blank for Response]** million packs per year
b. **What is the socially optimal quantity?**
- **[Blank for Response]** million packs per year
c. **If the government were to intervene and tax cigarettes, how large of a tax is needed per pack to achieve this optimal outcome?**
- **[Blank for Response]**
The graph and questions encourage a detailed understanding of the demand and social optimization regarding cigarette consumption and the potential impact of governmental taxation on achieving the socially optimal consumption level.
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