Medical evidence that more than two cups of coffee a day (considered by many to be a substitute for smoking) greatly increases the risk of stomach cancer.

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What are the likely consequences on the U.S. market for tobacco products for each of the events listed below? Would the supply curve or the demand curve shift? Please indicate the direction of the shift. State whether the equilibrium price and quantity would increase, decrease, or stay the same. Show the changes using a standard diagram with an upward-sloping supply curve and a downward-sloping demand curve.
The Food and Drug Administration classifies tobacco as an “addictive substance.”
Congress votes to raise the excise tax on all tobacco products.
Hurricane Fran dumps 15″ of rain on North Carolina and destroys 80% of that state’s tobacco crop.
Sixteen states sued the major tobacco companies for billions of dollars because of tobacco-related costs in their Medicaid programs.
Medical evidence that more than two cups of coffee a day (considered by many to be a substitute for smoking) greatly increases the risk of stomach cancer.

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