• 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

    The scheme of selection of units from the target population is pre-specified and then the sample is selected according to the scheme and not according to any biases or preferences of the researcher. The major types of PST are 1)

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

    The use of email can make it easier for customer if they have complaints or comments. They can send a quick email and it will get answered within a few days. Technology keeps developing to allow the customer to make a good choice.

  2. Applied Business Studies

    and realistic; the person running the business is the only one that can decide whether how high the goal should be. If a business truly thinks that the goal they are setting is achievable, then it can be deemed as realistic.

  1. Price Elasticity of Demand.

    Calculating the Coefficient of Price Elasticity Calculating the price elasticity of demand can be thought of as a two- step process. The first step involves calculating the percentage changes in price and quantity demanded from information on the old and new prices and quantities.

  2. Marketing principles

    They opened a factory in foreign country, so they were making no longer M&S products in UK. This idea looks perspective, customers like M&S products, and they now can buy it for event less expensive price than before. But it didn't go as well as it was expected to.

  1. Find out why these past few years, demand for public transport is gradually decreasing.

    So there is a lack of competition, this may cause the prices for bus fares. As there is a lack of competition, meaning that setting a certain bus fare won't change the demand, as consumers only have one choice. Externalities- prices and profits should be accurate signals, allowing the actors in the market mechanism to allocate resources efficiently.

  2. Price elasticity of demand.

    disproportionately and TR rises On the other hand if demand is inelastic: If price rises, quantity demanded falls proportionately less and TR rises If price rises, quantity demanded falls proportionately less and TR rises 2. Advertising Strategy It is in the interests of firms to try to make demand inelastic by creating brand loyalty and reducing substitutes.

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