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Which of the following is the correct answer to the question: Why do smokers pay almost all the taxes assessed on cigarettes?
I. Because cigarettes are addictive, the demand for them is relatively elastic when compared to the supply curve of cigarettes.
II. Because cigarettes are addictive, the demand for them is relatively inelastic when compared to the supply of cigarettes.
III. Cigarette manufacturers can very easily escape a state tax by selling in a different state.
Demand Curve
A graph showing the relationship between the price of a good and the quantity demanded by consumers, usually downward-sloping to indicate that demand decreases as price increases.
Supply Curve
The supply curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing and able to supply in the market.
Price of Beer
The amount of money required to purchase a unit of beer, influenced by factors such as production costs, taxes, and market demand.
Supply Curve
A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to produce and sell.
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