In 1998 an agreement known as the Tobacco Resolution was reached between a group of U.S. states and the tobacco industry. The agreement required the tobacco companies to pay the states $246 billion over twenty- five years. The tobacco companies are going to have raise prices to be able to pay the states. Economists found that cigarette smoking declines every 4 percent for every 10 percent increase in cigarette price. Will tobacco companies be able to pay the $246 billion without affecting their profits?