1255 SolutionCan answer only 4 parts according to chegg poli

Solution

Can answer only 4 parts according to chegg policy

Tax will raise price and decrease quantity demanded

In the end the true victim depends upon elasticity of supply and demand. If supply is completely elastic then consumers will be victim. If it is completely inelastic then producers are victim. If demand is completely elastic then suppliers are victim. If demand is completely elastic then victim are consumers. If elasticity is between these limits then both will be victims

No they are not committed to this market as smokers. They will switch to cotton if it\'s relative price increases

Supply curve will be less than perfectly inelastic. In other words it is elastic