Suppose smoking increases extern cost valued

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Price per pack                   $ 1       $ 150     $ 2     $ 250   $ 3   $ 3.50    $ 4.00   $ 4.50     $ 5.00

Quality (packs per day)    100      $ 90      $ 80       70      60       50          40           30           20

suppose smoking increases extern cost valued at 50 cents per pack   If a tax of $ 1per pack is imposed to a $ 2 market price  How many packs will be consumed  ( packs per day) ?

Is this rate too high, low, or the social optimal rate if consumption  ?  is it low, high, or the social optima rate

 

 

Reference no: EM13766790

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