Thoroughly analyze the impact of taxes on tobacco through the perspective of a smoker (a consumer in the tobacco market) worried about rising prices. Focus on price elasticity in your answer.

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A:

Q: Consider a market with a vertical demand curve. If the government imposes taxes on this market, the…

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Q: The reason which determines the elasticity of tax burden on buyers and sellers.

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A: Tax burden of buyers = Es / (Es - Ed), where Ed: Elasticity of demand Es: Elasticity of supply

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