Read the following scenario and answer the questions that follow. Scenario 4 In the market for cigarettes the impact of a specific excise tax of R10,00 is depicted in the diagram below. P D ST Тах E1 55,40 E 50,00 45,40 E2 21,00 ST 11,00 50 120 150 200 Packets per week (thousands) In the absence of any excise tax, a packet of cigarettes cost R50,00 and the equilibrium quantity is 150 000 packets per week. 7.1. For scenario 4, discuss the impact of a specific excise tax of R10,00 in the market for cigarettes with reference to the provided diagram. Your discussion should incorporate the change in price received by suppliers and paid by consumers owing to the imposition of the specific excise tax. Price per packet (R) ---i-

Read the following scenario and answer the questions that follow. Scenario 4 In the market for cigarettes the impact of a specific excise tax of R10,00 is depicted in the diagram below. P D ST Тах E1 55,40 E 50,00 45,40 E2 21,00 ST 11,00 50 120 150 200 Packets per week (thousands) In the absence of any excise tax, a packet of cigarettes cost R50,00 and the equilibrium quantity is 150 000 packets per week. 7.1. For scenario 4, discuss the impact of a specific excise tax of R10,00 in the market for cigarettes with reference to the provided diagram. Your discussion should incorporate the change in price received by suppliers and paid by consumers owing to the imposition of the specific excise tax. Price per packet (R) ---i-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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