Question

If congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the equilibrium price of cigarettes will fall. this fall in the equilibrium price can be attributed to a(n):

Answer 1

If the tax paid by the seller is reduced for a pack of cigarettes and other things being equal then the fall will occur in the equilibrium price of the pack due to the shift towards the right of the supply curve for cigarettes. These changes in the market equilibrium are explained by whether the prices tend to change are stay the same.