market for cigarettes.

market for cigarettes.

The U.S. government administers two programs that affect the market for cigarettes. Media campaigns and labeling requirements are aimed at making the public aware of the health dangers of cigarettes. At the same time, the Department of Agriculture maintains price supports for tobacco. Under this program, the supported price is above the market equilibrium price and the government limits the amount of land that can be devoted to tobacco production. Are these two programs at odds with the goal of reducing cigarette consumption? As part of your answer, illustrate graphically the effects of both policies on the market for cigarettes.

market for cigarettes.

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