Assignment:
Write two pages discussion and two response on the following:
It is sometimes argued that government has conflicting interests in taxing cigarettes, alcohol, and gasoline. Taxes increase the prices of these goods, thereby reducing the quantity that is demanded.
Proponents of these taxes see this as a good thing. Increased market concentration, however, would also increase prices and decrease quantity demanded.
After reading The Effect of Cigarette Taxation on Prices: An Empirical Analysis Using Local-Level Data , make an argument, based on what you know about price elasticity of demand, for whether or not antitrust enforcement is in the government’s best interes.