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Tobacco Taxation

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I have a few questions about tobacco taxation:

Is the tax levied on producers or consumers?

How does the tax affect supply and demand?

How does the tax affect the equilibrium price and quantity?

In this market, describe a hypothetical situation where a price ceiling or floor could be imposed. What implications would this have for the market?

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Please find my response below. I have done my best to answer your questions to the best of my ability.

1. The tax is levied on the consumers. Depending on which country you are in, a tax can also be levied on the producer of tobacco. However, because of the nature of the product, the producer simply passes on the extra tax over to the consumer in the form of higher prices. Thus, ultimately no matter ...

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