Question

The demand for cigarettes is highly inelastic. This suggests that the incidence of a higher tax on cigarettes will fall primarily on

Answer 1

cigarette consumers.

Step-by-step explanation:

Inelastic demand can be explained as a demand whereby the demand by buyers for a particular product ha little change compare to the change in price. Let say Athere is an increase in price by 20% , then demand for that product only experience decreases by only 1%, then we can say that demand is inelastic. For instance, when The demand for cigarettes is highly inelastic. This suggests that the incidence of a higher tax on cigarettes will fall primarily on cigarette consumers.