• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Consider public policy to reduce smoking.

Extracts from this document...

Introduction

Part 1: EC1F1A Introductory Economics. Autumn Term Essay. Consider public policy to reduce smoking. Government justification for its attempts to reduce smoking are based around the key points that: * Smoking damages health and increasing the price of a packet of cigarettes will reduce the number of smokers. * Revenues raised from the tax on tobacco will help to offset costs to the National Health Service from smoking related illnesses. a) Price elasticity of demand measures how much quantity demanded responds to changes in the price. The price elasticity of demand for a packet of cigarettes is about 0.4, this is an example of a product with an inelastic demand (because p.e.d<1). If the government wants to reduce smoking by 20% then the price of cigarettes must be increased by 50%. The price of cigarettes is currently �2.00 (50% 0f �2.00 is �1.00 ), meaning that the new price should be �3.00. The method of calculating this increase in price is shown below along with an example of an inelastic demand curve. ...read more.

Middle

For example, before the ban on leaded petrol was introduced, an increase in the price of leaded petrol would not have changed my demand for it in the short term. However, the next car that I bought would more than likely use unleaded petrol. This is very similar to the trend we would see with an increase in the price of cigarettes. An addiction cannot simply be forgotten about, but over time and with enough will power (will power could be increased by the realisation of a 50% increase in price), the number of people who still buy cigarettes at the new, higher price will decrease. c) 'Studies also find that teenagers have a higher price elasticity (for cigarettes) than adults'. A higher price elasticity can be explained in two ways compared to the general price elasticity of cigarettes, in which a 50% increase in price will result in a 20 % decrease in demand. The first method of explaining a higher price elasticity is that a 50% increase in price will result in a decrease in demand >20%. ...read more.

Conclusion

This ability to give up smoking more easily is indicated by the higher price elasticity of teenagers, they are more prepared to give up than adults are when the price of cigarettes is increased. In conclusion, the government policy to reduce smoking by increasing the price of cigarettes will work, however it will take a long while. Some people simply do not want to give up smoking and although they cannot really afford to smoke, will carry on regardless. It is people like this who will not see the health issues behind the increase in price of cigarettes but only that they are being forced to pay more for their habit, they will be all to quick to criticise the government for placing an unfair tax on those who feel that they have no choice but to pay. Perhaps a better method for reducing the number of smokers would be to increase the price less and make up for this by banning smoking in public places, banning tobacco advertising within the community (including sporting events and billboards etc.) and increasing awareness as to just how much smoking really does harm your body. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Marketing & Research section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Marketing & Research essays

  1. Marketing analysis of Marlboro cigarettes

    There is no single reason why young people engage in risky behaviors, such as experimenting with cigarettes, alcohol or drugs. Besides, Marlboro company is also implementing vision that to develop and create a new reduced-risk cigarette for consumers. "As Chief Operating Officer of the company, I can assure you that

  2. Marketing Research

    could be a consumer, a dealer, a person exposed to an advertisement, company, household etc. Population: This is not the entire population of a given geographic area, but the predefined set of potential respondents (elements) in a geographical area for e.g , a population may be defined s " all mothers who buy branded baby food in Mumbai".

  1. Applied Business Studies

    Another type of employee is the managers, who are in charge of that particular store. They are very important because they make most of the decisions, if prices need to be changed etc. Employees are internal stakeholders. In my business 'Actors Vision', I need my employees because they are the

  2. Price Elasticity of Demand.

    Elastic versus Inelastic Demand In one extreme, the quantity demanded of a good may be insensitive to a change in price. Consumers will purchase the same quantity of the good no matter how high or low the price is. In this case, the percentage change in quantity demanded is zero, regardless of the value of the percentage change in price.

  1. I am going to be writing about the concepts of marketing distinctiveness of the ...

    so you have to keep improving products to keep up with the competition. This is exactly what iPod is doing at the moment. Phillips on the other hand was one of those who failed to realise the consequence of these principles as it had created the mp3 player but it

  2. Price elasticity of demand.

    The period of time since the price change. Applications of Elasticity 1. Pricing strategy of firms The total sales revenue (TR) is price times quantity (TR = PxQ). So if demand is elastic: If price rises, quantity demanded falls disproportionately and TR falls If price falls, quantity demanded rises

  1. Business studies, product development

    Also you will have to make sure that the price you sell the product for you will be able to make a profit after you pay for all of the materials, advertisement and staff salaries. If the price was to low and you didn't even break even there wouldn't be

  2. SunCity - developing marketing strategy for problem

    have much retained profit in case of emergencies, and this is very important. There may however be a problem with this aim as I am asking Sun City to tell me their budgets, including detailed profit and loss accounts etc this may be a problem due to confidentiality.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work