Premise: 10% Up cig price, 4% down sales
Also, price of cig = base price + profit + tax
in this case price incresed almost 10% (9% +90cent)
Conclusion: the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.
A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia. --- if they did, total price will not be increased to 10% so its unlikely that 4% decrease will be observed.
...
Also, price of cig = base price + profit + tax
in this case price incresed almost 10% (9% +90cent)
Conclusion: the tax hike stands an excellent chance of reducing per capita sales of cigarettes by four percent.
A. Tobacco companies are unlikely to reduce their profit per pack of cigarettes to avoid an increase in the cost per pack to consumers in Coponia. --- if they did, total price will not be increased to 10% so its unlikely that 4% decrease will be observed.
...
