Recall the Application The change in demand for cigarettes r

Recall the Application. The change in demand for cigarettes resulting from the decrease in taxes would normally create, ceteris paribus, A) an increase in their supply. B) a decrease in their supply. C) an increase in their quantity supplied. D) a decrease in their quantity supplied. According to this Application, after the government deceased cigarette taxes in several Canadian provinces in 1994, the price of cigarettes in these provinces decreased by roughly ________ percent. A) 8 B) 17 C) 50 D) 88 According to this Application, after the government deceased cigarette taxes in several Canadian provinces in 1994, the decrease in the price of cigarettes in these provinces A) more than doubled the smoking rate. B) created no noticeable change in the smoking rate. C) increased the smoking rate by roughly 17 percent D) was accompanied by a slight decrease in the rate of smoking. As the price of a product falls, the demand for the product increases, ceteris paribus. A) True B) False

Solution

Correct Answer:

C) an increase in their quantity supplied

Explanation:

Decrease in taxes will reduce the price. It will create bigger demand other things remain constant. Thus, increased demand will be met with increase in supply. Also, more supply will be available at a particular price of cigarette.

Pl. repost other unanswered questions for their answers!