vtkinger: Can you help me describe the effects of taxation and price controls on the economy?
I am looking to do a report on the federal taxation of tabacco…..I need to find two good articles deplicting the following.
Is the tax levied on producers or consumers?
How does the tax affect supply and or demand?
How does the tax affect the equilibrium price and quantity?
In this market (tabacco) describe a hypothetical situation where a price ceiling or floor could be imposed. What implications would tihs have for the market?
Answers and Views:
Answer by JMF
Is the tax levied on producers or consumers?
Really it is levied on consumers.
How does the tax affect supply and or demand?
Tobacco is drogue, and that simulate a basic necessity, then tobacco is not affected by taxes.
How does the tax affect the equilibrium price and quantity?
In one society that there are not real right status, if price will increase maybe producer give less minus tobacco for the same price.
In this market (tobacco) describe a hypothetical situation where a price ceiling or floor could be imposed. What implications would this have for the market?
If the project that converts tobacco in medicine will make a reality, this market will increase a lot.
If tobacco continue been unhealthy more and more overtax will activate in the future.
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