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The Scottish Smoking ban

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Introduction The Scottish Smoking ban is the topic which will be discussed within this essay. The ban is allocated to all enclosed public areas, which publicans are sure will have a negative effect on their sales and cigarette retailers believe it to have a negative effect on the sales of their products. Within the essay supply and demand graphs will be used to show the effect the ban will have on such things as the alcohol sales in pubs and clubs. The topic is completely relevant at this present time as the ban was only introduced this month, Sunday 26th March 2006. It has also been discussed by Scottish Executives since the ban was introduced in Dublin. Economic Theory The statement which has been given to discuss is:- "Smoking is a classic example of a negative externality" In the case of smoking the meaning of externality is; use of a substance by an individual which will effect a bystander. Therefore the meaning of this statement is that although it's the individuals' choice to purchase the cigarettes and smoke the cigarettes, the results of the smoker's actions are not only affecting them but people round about them are being harmed by it. ...read more.


Even though there will be a decline in demand there is no movement in the supply, as the pubs and clubs will still have the same amount of alcohol to supply to the customers. Therefore the point where supply meets demand (equilibrium) is lower showing a decrease in revenue. S1 P D1 D2 E2 E1 Q However, all of this information is based on the events which took place in Dublin after the ban. However, if these facts were based on the information given on the BBC website stating that the results after the ban was introduced in New York City were positive then the supply and demand curve would look entirely different. The pubs, clubs and restaurants within New York after the ban was introduced showed a positive effect with them all showing an increase in trade. Therefore, the supply and demand graph would look more like this:- D2 S1 P D1 S2 E1 E2 Q In the table above the demand curve has shifted to the right, showing an increase in demand. Also in this case as demand has risen so has supply, resulting in the supply curve making a shift to the right. ...read more.


Therefore showing a demand and supply increase in the market, as shown below. D2 S1 P D1 S2 E1 E2 Q Above the demand has increased therefore the curve has shifted to the right. Due to the rise in demand the supply will need to increase to meet consumer demand resulting in a shift to the right. Revenue increasing is shown with the increase of the equilibrium point. Conclusion In conclusion it is shown that with the introduction of the smoking ban that it will help with the Scottish health problems, resulting in less use of the NHS. However it has shown that in Dublin it affected the publicans in a negative way, which has resulted in the pubs and clubs revenues dropping. However, it was shown in the complete reverse in New York City with their pubs, clubs and restaurants showing an increase in revenue. As the ban has just been introduced this month in Scotland it is too early to definitely state which category Scotland will fall under, negative or positive. However, as it is a positive for the health of the Scottish people the hope is that it will be a positive for the economy and that Scotland will follow in the trend of New York City. ...read more.

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