Chapter 4 Curiosities

I imagine they are advertising that since the market rate for cigarettes is "x" their price is "x + cigarette tax." I don't consume cigarettes, so I am not too familiar with the market, so this is me trying my best. Yes, you are correct in that if they charged the state minimum of "$0 + cigarette tax" they would be would lose money as they would not be able to cover the cost of the pack.