The inverse demand function for cigarettes is given by P(q)…
The inverse demand function for cigarettes is given by P(q) = 186 – 6q where q is the quantity of packs of cigarettes that are sold. The inverse supply function is given by P(q) = 90 + 2q. In the past, cigarettes were not taxed, but now a tax of $32 per pack has been introduced. What is the effect of the tax on the equilibrium quantity of cigarettes supplied?