Which of the following statements is TRUE regarding cigarettetaxes?
A)Cigarette manufacturers bear almost all of the cigarette taxes.
B)Cigarette manufacturers tend to ship their product from low- tax states to high-tax states.
C)The elasticity of cigarette supply in all states is very small so cigarette manufacturers receive higher after-tax prices in
Higher-tax states.
D)After-tax prices received by cigarette manufacturers are about the same in all states.

Question

Quizplus · Accepted Answer

The after-tax prices received by cigarette manufacturers tend to be about the same in all states because the tax differences are generally passed on to the consumers through higher retail prices, rather than being absorbed by the manufacturers.

Which of the Following Statements Is TRUE Regarding Cigarettetaxes