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[Solution] Recently, the Obama administration proposed a $1.00 per unit (pack) excise tax on cigarettes (which would be imposed legally or statutorily on

Question: Recently, the Obama administration proposed a $1.00 per unit (pack) excise tax on cigarettes (which would be imposed legally or statutorily on cigarettes sellers). Some news reports have suggested that the proposed tax would increase cigarettes prices by $1.00 per pack and be paid by smokers (cigarette buyers). Using (separate) competitive supply and demand diagrams of the cigarettes market carefully show and explain TWO extreme demand and supply conditions under which these news reports would be true

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[Solution] Recently, the Obama administration proposed a $1.00 per unit (pack) excise tax on cigarettes (which would be imposed legally or statutorily on

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