Suppose That a Carton of Cigarettes Costs $55 in Springfield,Illinois

question 146

Essay

Suppose that a carton of cigarettes costs $55 in Springfield,Illinois but is just $50 in nearby St.Louis,Missouri.Use a supply and demand diagram to illustrate and explain what you would expect to happen in each location,assuming the law of one price holds.What is the most likely reason that a price difference persists between these two nearby locations?

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Definitions:

Holographic

Pertaining to holograms, typically used to describe a three-dimensional image formed by the interference of light beams from a laser or other coherent light source.

Abatement

A reduction, decrease, or removal of something, especially of a nuisance or environmental hazard.

Estate

All of the property, assets, and debts that a person leaves behind at death.

Estate

All the money, property, and assets owned by an individual at the time of their death.