A sales tax on cigarettes would likely decrease the quantity demanded by a smaller amount

Question

Quizplus · Accepted Answer

Smokers who view cigarettes as a necessity are likely addicted to nicotine and therefore have a higher demand for cigarettes regardless of the price increase from the sales tax. This means that the quantity demanded will decrease by a smaller amount compared to other smokers who may be able to reduce or quit smoking with the price increase.

A Sales Tax on Cigarettes Would Likely Decrease the Quantity