Explain how a tax could reduce the sales of cigarettes

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Many governments around the world have implemented heavy taxes on cigarettes and other tobacco products in order to reduce the number of smokers. Critically evaluate the effectiveness of this policy. The following should be your focus:

1) Explain how a tax could reduce the sales of cigarettes.

2) Explain whether the demand for cigarettes is elastic or inelastic.

3) Compare the tax to alternative policies such as a price floor or education campaign.

4) Critically evaluate the effectiveness of the cigarette tax as a policy in reducing the number of smokers.

Reference no: EM132503631

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