if-a-government-imposes-a-tax-on-cigarettes-which-have-inelastic-demand-what-is-

Question

If a government imposes a tax on cigarettes, which have inelastic demand, what is the likely effect on consumer behavior?

Accepted Answer

Consumers will continue to buy similar quantities despite the price increase.

Answer

Consumers will switch to alternative products.

Answer

Consumers will significantly reduce their consumption.

Answer

Consumers will stop buying cigarettes altogether.