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UK Budget : 37p on Fags from 6PM

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21-03-2012, 01:39 PM

#11

CharlieO

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CharlieO

Join Date: Nov 2010

Location: Take Me Down To Paradise

Posts: 8,051

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UBB: Nikki

BB11: Josie

Quote:

Originally Posted by MTVN

They're just putting them up every single budget now

Indeed, and for good reason. They are a negative externality and therefore the government tax the production to lower consumption. The inelastic nature of their demand is what causes the price to fall mainly on the consumer rather than the producer.

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