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In the last couple of years, private jail e-cigarette vendors have popped up with names like JailCigs and eCigs 4 Inmates and CrossBar. Their pitch to sheriffs is enticing: The companies sell the e-cigarettes to inmates for as much as $15 each -- a 400 percent markup -- and promise commissions as high as 25 percent

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Alternatively, if the demand is inelastic and the supply is elastic (the cigarette industry) the burden of a new tax falls very largely on the consumers, with most of the tax revenue coming out of consumer surplus