... has intervened to various reasons. In order to have less consumption of cigarettes, the government has imposed indirect taxes. [PP1]They have done this for various reasons. These taxes may have been added to raise the tax revenue to fund the government funding. Also to discourage the consumption of demerit goods such as alcohol, gambling, tobacco, as in this case it has been done for tobacco. Another reason the taxes may have been imposed could be for environmental benefits to lower pollution (passive smokers). There are severalare not several other methods the government can use to reduce consumption such as advertising against cigarette smoking, however the author does not provide these options, nor does the author justify why increasing taxes is the best option. The diagram below shows how the specific tax imposed on the cigarettes has an effect on the market. Specific tax is an indirect tax of a fixed ...

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