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Table 17-11 Two cigarette manufacturers (Firm A and Firm B) are faced with lawsu

ID: 1096894 • Letter: T

Question

Table 17-11 Two cigarette manufacturers (Firm A and Firm B) are faced with lawsuits from states to recover the healthcare related expenses associated with cigarette smoking. Both cigarette firms have evidence that indicates that cigarette smoke causes lung cancer (and other related illnesses). State prosecutors do not have access to the same data used by cigarette manufacturers and thus will have difficulty recovering full costs without the help of at least one cigarette firm study. Each firm has been presented with an opportunity to lower its liability in the suit if it cooperates with attorneys representing the states.

Firm B Concede that cigarette smoke causes lung cancer Argue that there is no evidence that smoke causes cancer Firm A Concede that cigarette smoke causes lung cancer Firm A profit = $

Explanation / Answer

None of the above; in pursuing its own best interests, Firm B will in no case concede that cigarette smoke causes lung cancer

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