That’s not how capitalism works. If the tobacco industry could raise prices and get more money today, they would. Since they haven’t, you have to assume that any increased taxes or burden on them will reduce their profits.
Yes, it might increase prices to the end consumer, because the demand curve will change when the costs change. But that doesn’t mean the tobacco industry is making any more money. If it did, they would already charge more.
“That guy happened to tangentially mention tax so you must’ve been talking about tax, herp derp”
Edit: Is it really that hard to figure out that I started this whole thread in reference to the topic of prohibition as the title suggests? I’m not talking about taxes. I never mentioned taxes. I don’t care that anyone else is talking about taxes.
Prohibition has no net effect on demand, it simply enables black markets. Alcohol use after Prohibition was not higher than pre-prohibition, but did rise to the same levels fairly quickly.
Supply and demand do not have an inverse relationship. Demand exists, and when supply exceeds demand, prices fall. When supply does not meet demand, prices rise. You understand they are related but forgot the actual curve on the graph. Supply and demand can both be low, for instance, as is the case with mega yachts. Supply and demand have no direct effect on one another, though low supply does tend to encourage firms to increase supply to try to compete and meet the demand.
Data during prohibition is irrelevant to this specific discussion, because your claim is that demand goes up when goods are prohibited, which is false, as I showed with my link
I don’t believe you have actually taken Econ 101, given the things Ive seen you say here.
Thanks for proving my point for me. I appreciate it.
Your link shows an estimate of alcohol consumption during prohibition based on mortality, but there is. Zero. Accurate. Data. of alcohol consumption during the prohibition.
The important part of that link was not during prohibition, which is irrelevant, because regardless of demand the number of people with access to alcohol was lower, but rather that after prohibition, usage rates did not surpass pre-prohibition levels.
When supply does not meet demand, prices rise
This is not an inverse relationship between supply and demand. The supply is not affecting the demand, which is what “inverse relationship” requires.
That’s not how capitalism works. If the tobacco industry could raise prices and get more money today, they would. Since they haven’t, you have to assume that any increased taxes or burden on them will reduce their profits.
Yes, it might increase prices to the end consumer, because the demand curve will change when the costs change. But that doesn’t mean the tobacco industry is making any more money. If it did, they would already charge more.
Wrong. Prohibition increases demand.
Edit: Based off some replies, I think a lot of people are forgetting some rudimentary aspects of the concept of “demand”, so allow me to help:
putting a tax on something is not the same as prohibiting it.
Go ahead and look at the post title
go ahead and look at the comment you were replying to
“That guy happened to tangentially mention tax so you must’ve been talking about tax, herp derp”
Edit: Is it really that hard to figure out that I started this whole thread in reference to the topic of prohibition as the title suggests? I’m not talking about taxes. I never mentioned taxes. I don’t care that anyone else is talking about taxes.
Prohibition has no net effect on demand, it simply enables black markets. Alcohol use after Prohibition was not higher than pre-prohibition, but did rise to the same levels fairly quickly.
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.nber.org/system/files/working_papers/w3675/w3675.pdf&ved=2ahUKEwjF-8C_juCBAxXxnWoFHdTEDkgQFnoECA4QBg&usg=AOvVaw0rwVjvtYD6D0XQlMyHfW8D
Incorrect. Prohibition decreases supply. Supply and demand have an inverse relationship. This is economics 101.
There exists no accurate data of consumption during prohibition because it was a black market.
Supply and demand do not have an inverse relationship. Demand exists, and when supply exceeds demand, prices fall. When supply does not meet demand, prices rise. You understand they are related but forgot the actual curve on the graph. Supply and demand can both be low, for instance, as is the case with mega yachts. Supply and demand have no direct effect on one another, though low supply does tend to encourage firms to increase supply to try to compete and meet the demand.
Data during prohibition is irrelevant to this specific discussion, because your claim is that demand goes up when goods are prohibited, which is false, as I showed with my link
I don’t believe you have actually taken Econ 101, given the things Ive seen you say here.
Thanks for proving my point for me. I appreciate it.
Your link shows an estimate of alcohol consumption during prohibition based on mortality, but there is. Zero. Accurate. Data. of alcohol consumption during the prohibition.
The important part of that link was not during prohibition, which is irrelevant, because regardless of demand the number of people with access to alcohol was lower, but rather that after prohibition, usage rates did not surpass pre-prohibition levels.
This is not an inverse relationship between supply and demand. The supply is not affecting the demand, which is what “inverse relationship” requires.
How many times do I have to tell you that this is impossible to know based off indirect estimates before you get it? Because this is the third time.
Maybe read to the end of that sentence and it will make more sense. I know it was a long sentence, and that’s scary, but I believe in you.