1) Cigarettes differ in strength based on taste and potency. The strengths depend on the type of tobacco leaf that is included in the cigarette, the location of where the tobacco plant was picked, and how the leaf is handled. In Australia, the tobacco leaf that is wanted the most is Virginia tobacco. The tobacco from Virginia includes a large amount of sugar content ("What 's in a Cigarette? | myVMC", 2016). Cigarettes have nicotine, an addictive toxic that engenders smokers to crave for a cigarette.The addictive part of smoking cigarettes is a big strength for tobacco companies to make more money from their products.
2) Smoking increases the inclination to drinking alcohol. Consuming alcohol remarkably reduces the inclination to smoke. Cigarette …show more content…
The demand for tobacco products is not as elastic as demand for other products. The increase of the price of cigarettes is because the rate of people smoking and the number of tobacco products that loyal smokers still smoke ("Price
Elasticity of Demand For Tobacco Products", 2016). Due to the growth of taxation, the statistics of the usage of cigarettes are going down. The rise in taxes prevent non-smokers from beginning, motivate smokers to quit, and to influence former smokers from smoking cigarettes again ("Price
Elasticity of Demand For Tobacco Products", 2016). Expansion in cigarette taxes engenders more expensive cigarettes for people. In addition, the outcomes from previous cigarette elasticity data ranges from -0.10 to -1.48 (Lyon and Simon, 1968). Cigarette smoking increases the amounts of death in society. Increases of cigarette prices may be a deterrent government regulations may use to reduce the amount of cigarette usage (Lyon and Simon, …show more content…
The cross price elasticity for electronic cigarettes was positive and was estimated to be 0.16 (Grace and Kivell, 2015). Electronic cigarettes are known as substitutes for cigarettes. According to data by Laffter, the cross price elasticity of demand for the price of cigarettes is -1 in the short run. In the long run, the cross price elasticity for the price of cigarettes is -1.02 (Laffter, 2014). The demand for other types of tobacco will increase subsequently when the prices go up for a certain type of tobacco. Tobacco users will substitute cigarettes with other types of tobacco depending depending on area and country they are
2) Smoking increases the inclination to drinking alcohol. Consuming alcohol remarkably reduces the inclination to smoke. Cigarette …show more content…
The demand for tobacco products is not as elastic as demand for other products. The increase of the price of cigarettes is because the rate of people smoking and the number of tobacco products that loyal smokers still smoke ("Price
Elasticity of Demand For Tobacco Products", 2016). Due to the growth of taxation, the statistics of the usage of cigarettes are going down. The rise in taxes prevent non-smokers from beginning, motivate smokers to quit, and to influence former smokers from smoking cigarettes again ("Price
Elasticity of Demand For Tobacco Products", 2016). Expansion in cigarette taxes engenders more expensive cigarettes for people. In addition, the outcomes from previous cigarette elasticity data ranges from -0.10 to -1.48 (Lyon and Simon, 1968). Cigarette smoking increases the amounts of death in society. Increases of cigarette prices may be a deterrent government regulations may use to reduce the amount of cigarette usage (Lyon and Simon, …show more content…
The cross price elasticity for electronic cigarettes was positive and was estimated to be 0.16 (Grace and Kivell, 2015). Electronic cigarettes are known as substitutes for cigarettes. According to data by Laffter, the cross price elasticity of demand for the price of cigarettes is -1 in the short run. In the long run, the cross price elasticity for the price of cigarettes is -1.02 (Laffter, 2014). The demand for other types of tobacco will increase subsequently when the prices go up for a certain type of tobacco. Tobacco users will substitute cigarettes with other types of tobacco depending depending on area and country they are