Question

The government in your country is considering three programs that affect the market for cigarettes.

Program 1: Media campaigns and labeling requirements aimed at making the public aware of the dangers of cigarette smoking.

Program 2: A price-support program for tobacco farmers.

Program 3: A cap on the number of cases of cigarettes sold per quarter at 20,000 cases.

Determine the impact of the market for cigarettes if Program 3 is implemented.

a) Impact on demand_________________

b) impact on supply __________________

c) Impact on price ____________________

d) Impact on quantity _________________

Chose from answers below:

Decrease towards equilibrium   

Increase towards equilibrium

No impact

Change in quantity uncertain   

Quantity above equilibrium

Price above equilibrium

Price below equilibrium

Shift outwards / to right

Shift inwards / to left

Excess supply

Change in price uncertain

Quantity below equilibrium

Excess demand

Increase equilibrium price

decrease equilibrium price

increase equilibrium quantity

decrease equilibrium quantity

Answer 1

Hi.

The answer of the following question is given below as follows:.

The country's government is considering three programs that will affect the cigarette market. Therefore, Program 2 is implemented in a price support program for tobacco producers.

Let's discuss the impact in the Market for tobacco items generally cigarettes.

a) impact on demand will be quantity below Equilibrium.

b) Impact on supply now quantity above the Equilibrium.

C) Impact on pricing that price will go above the Equilibrium .

D) Impact on quantity is Excessive supply will occur .

I hope I have served the purpose well.

Thanks