The federal government is concerned about the negative effects of cigarette smoking in the United States.Suppose Congress is considering two plans.One plan would limit the production of cigarettes.The other would require manufacturers to include graphic photos on cigarette packages of people suffering cancer's effects.Which of the following statements is true?
A)Both programs would increase the price of cigarettes.
B)Both programs would reduce the quantity of cigarettes sold.
C)Both programs would decrease revenues for cigarette manufacturers.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Both plans would aim to reduce cigarette consumption, which would ultimately lead to a decrease in the quantity of cigarettes sold. However, only the plan to limit production would increase the price of cigarettes, while the plan to require graphic photos would not necessarily change the price of cigarettes. And although both plans would likely decrease revenues for cigarette manufacturers, this is not necessarily true for all companies in the industry.

The Federal Government Is Concerned About the Negative Effects of Cigarette