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In: Economics

There are two common ways to discourage tobacco use; taxes on tobacco and information campaigns on...

There are two common ways to discourage tobacco use; taxes on tobacco and information campaigns on the hazards of tobacco use. Which way causes a decrease in demand for smoking?

a) Information campaign on hazards of tobacco.

b) Tax on tobacco products that drives up its price.

c) Both cause a decrease in demand.

Solutions

Expert Solution

Taxes on tobacco would decrease the supply of tobbaco , therefore shift the supply curve to the left. And Information campaigns on the hazards of tobacco use would decrease the demand for tobbaco , shifts the demand curve to the left,so demand for smoking would decrease. Hence, option(A) is correct.

Rahul Sunny answered 2 years ago
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