Cigarette Purchase

Which of the following statements correctly describes the effect of an increase in the tax on cigarettes?
A. The number of packs of cigarettes purchased will fall, and total expenditures on cigarettes will also fall.



B. The number of packs of cigarettes purchased will rise, but total expenditures on cigarettes will fall.



C. The number of packs of cigarettes purchased will fall, but total expenditures on cigarettes will rise.



D. The number of packs of cigarettes purchased will rise, and total expenditures on cigarettes will also rise.
Best Answer - Chosen by Asker
C



Expenditures means the total amount of money spent on cigarettes. This includes what the cigarette companies must pay, as well as what the consumers must pay due to the increase in tax imposed on cigarettes by the government.



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