A local government imposes a per-unit tax on cigarettes, which are known to have inelastic demand. Given this information, which of the following statements best describes the expected impact of this tax on cigarette consumption and revenue?

When a local government imposes a per-unit tax on cigarettes, it affects both the price and consumption of cigarettes. Since cigarettes have inelastic demand, this means that consumers will not significantly reduce their quantity demanded even when prices rise due to the tax. For example, if the price of cigarettes goes up by a dollar because of the tax, many smokers will continue to buy them because they are addicted and find it hard to stop. As a result, the government is likely to see an increase in tax revenue, even though the total number of cigarettes sold may not drop much. Therefore, the tax will likely lead to higher prices for consumers but will not significantly decrease cigarette consumption.