The government wants to implement a $1 excise tax on cigarettes,
which is levied on the consumers. That is, for every pack of
cigarettes that a consumer buys, he or she has to pay a $1 tax. (a)
Use a supply and demand diagram to illustrate what happens to the
price and quantity of cigarettes. (b) If the supply curve of
cigarettes is perfectly elastic, what happens to the price and
quantity of cigarettes? (c) If the supply curve of...