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Cigarette Tax Policy

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• Cigarette tax policy
The establishment of a cigarette tax policy would contribute to the reduction of cigarette consumption, because the equilibrium price of the market would increase and considering the consumer's budget constraint, the quantity demanded would decrease. In this sense, the demand model is optimal to represent the establishment of this policy and the reduction of cigarette consumption as a consequence. Because this model specifies the demand equation so that the quantity of cigarettes demanded is a function of cigarette prices, consumer income, and tax policies.
In this sense, it is assumed that the consumers has a rational behavior, and due to their budgets constrains will decrease the purchase of cigarettes, without considering

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