1) Elasticity is how people react to the changes and measures the sensitivity or responsiveness of quantity demanded to change in product price. The equation form is the elasticity demanded is equal to the percentage change in quantity demanded over the percentage change of price.
2) Cigarettes are inelastic because even though the price may increase, consumers will still purchase this product because it’s a drug addiction. As a health advisor to the Health Minister I would ban the sales of tobacco and reinforce strict laws to prevent smoking, such as fines and jail time. Also, advertise during television shows and have more health awareness classes available to society. Other than that, there is not much I can do because of the addiction that comes from tobacco.
3) If the price on cigarettes were raised the tobacco companies would benefit because no matter what consumers will still be willing to pay the extra couple of dollars to feel relaxed. Also, the government will benefit because of the taxes.
1. Explain in simple terms, the concept of elasticity.
Basically, the concept of elasticity calculates how the change in price of a product would affect the quantity demanded from the product by the consumers.
2. Are cigarettes an elastic or inelastic product? Explain your answer. Why might price changes not stop people from smoking? You are the economic adviser to the Health Minister – what would recommend to stop youth and adult smoking?
Cigarettes are an inelastic product, due to the fact that prices changes do not affect the quantity demanded. Prices will not stop people from smoking, because cigarettes have an addicting factor to it and smokers believe that they are a necessity to them. To stop youth and adult smoking, it would be advised to ban the selling of cigarettes entirely.
3. If prices on cigarettes are raised, who benefits?
If the prices on cigarettes were to be raised, the manufactures of the cigarettes, distributors of the product and the government, based on tax revenue, would benefit from this.
By: Joshua Thang, Benny Chow, Jimmy Chen, Michael Hoang.
Basically, elasticity reveals the consumer reaction of the quantity demanded of a good or service whenever there is a change in price. If the quantity demanded of a product either drops or rises, it is an elastic product. However, if the consumers continue to purchase a good or service no matter the price, it is an inelastic product.
Cigarettes are an inelastic product especially for people who have been smoking for a long period of time. Prices might not stop people from smoking. Since cigarettes are highly addictive and get people hooked, a price change alone is not enough for people to give up the habit.
If I was the economic adviser to the Health Minister, I would recommend drastically raising the prices of cigarettes as well as lowering the prices of products which help people quit smoking. That way, people will consider quitting if it's a lot less cheaper than smoking and killing their lungs.
If the prices on cigarettes are raised, I think that the tobacco companies would benefit the most because of the high number of people who continue to purchase cigarettes no matter the price.
2. Elasticity of demand measures the responsiveness of quantity demanded to change in the product price. It is the reaction of how people react toward the change in price.
3. Cigarettes are an inelastic product because even though the prices increase, people are addicted and are sometimes pressured to smoke that’s why price increase doesn’t stop people from smoking. I would recommend that the government should make a law towards a certain age allowed to smoke as well as limiting places that are allowed to sell cigarettes.
4. If prices on cigarettes are raised the producers, wholesalers as well as retailers benefit.
2. Explain, in simple terms, the concept of elasticity.
It is the tolerance to price changes and how it affects the quantities demanded. The more elastic the product is, the more likely that poeple would react to greater price changes. Such as, if LV had a 50% off sale, chances are people will rush to LV and get 10 bags. (Even though this will never happen in real life) On the other hand, if the product is inelastic, people are less likely to react even if prices are going up. For example, if heating costs are going up, people are still likely to use approximately the same amount, because heating is a necessity for the home.
3. Are cigarettes an elastic or inelastic product? Explain your answer. Why might price changes not stop people from smoking? You are the economic adviser to the Health Minister – what would recommend to stop youth and adult smoking?
Cigarettes are inelastic, because even if the price increases, the quantity demanded does not significantly decrease. Price changes do not stop people from smoking because smokers are too addicted to change their habits and quit smoking. If we were the economic advisor to the Health Minister, we would recommend they raise prices on cigarettes and advertise the dangers and risks of smoking more often.
4. If prices on cigarettes are raised, who benefits?
If prices are increased, cigarette companies are most likely to benefit because the number of long time smokers are not likely to change, and therefore, revenue would increase as these consumers continue to purchase the same amount.
1.) Elasticity is how people react to price changes. If a product is elastic, then people will be sensitive to a price change. If the price change is increase too much, people may cut back on purchases and you lose revenue. If a product is inelastic, then even if the price is increased, people will still buy the product. The formula to figure out elasticity is Ed (Elasticity of Demand) = percentage changed in Quantity demanded over the percentage changed in Price.
2.) Cigarettes are an inelastic product. This is because, even if price changes were increased, the over all sales of cigarettes wouldn’t go down because people wouldn’t react to the price increase. Price changes wont affect whether people buy the product or not because they are addictive. People who are addicted won't quit unless they have the will to quit. If i was the economic adviser to the Health Minister, I would suggest to raise prices on cigarettes to youth because they would be more inclined to stop because they wont have enough money to keep up the habit. I would also suggest giving free products to youth in schools to help quit them smoking.
3.) If the price on cigarettes are raised, the manufacturers who produce the cigarettes, and the government would benefit. The manufacturers would benefit because people would still buy the products even at a raised price from being addictive, and the government would see more tax revenue from the higher prices.
Smoking Cigarettes is a challenging addiction to overcome, which is why cigarettes are considered to be an inelastic product. Elasticity is defined as the consumers' response to the change in prices of certain products. In this case, if prices of cigarettes increase, people would be willing to compensate for the difference in cost because they are addicted. The increase in prices and the insignificant change in quantity demanded helps increase overall revenues of the cigarette companies.
In order for the Health Minister to successfully accomplish their goal of stopping youth and adults from smoking, it would be wise to immensely increase the price of cigarettes. It is crucial to increase the price of cigarettes by a large margin instead of slowly increasing it. Smokers may be more accustomed to the slower increase in prices, which would not stop adults from smoking, as opposed to a rapid increase in prices.
1) The concept of elasticity has many terms that define its concept. The first term that is essential is quantity demanded. Quantity demanded can be defined as an amount of a demanded product or a service by the people. Another crucial term to understand is elasticity of demand and this term can be defined as stated by Mary on her channel mjmfoodie “demand measures the responsiveness of quantity demanded to a change in the product price”. Basically elasticity of demand is the % change of demanded over the % change over price. Now we have knowledge of the two essential terms but there is the natural law of demand and could be understood by saying, raising prices will drop demand. To understand the concept of elasticity more thoroughly there would have to be an example. An example of this concept is the price change in textbooks from the price $100 to $101 causes a small change in elasticity.
3) Cigarettes are inelastic products because people who are hooked on cigarettes will continue to buy them regardless of price changes. I would recommend the Health Minister to focus on educating people about the negative health effects that smoking causes. I would also advocate for laws that ban smoking.
4) If the prices on cigarettes are raised, cigarette manufacturers would benefit because people would still be buying cigarettes but at higher prices. The government would also benefit because of taxes.
1.Watch the video on elasticity @ http://www.youtube.com/watch?v=4oj_lnj6pXA 2.Explain, in simple terms, the concept of elasticity. 3.Are cigarettes an elastic or inelastic product? Explain your answer. Why might price changes not stop people from smoking? You are the economic adviser to the Health Minister – what would recommend to stop youth and adult smoking? 4.If prices on cigarettes are raised, who benefits?
Answers
2. Elasticity is how sensitive a customer is to a price change in a product. 3. Cigarettes are both elastic and inelastic, but it depends on who buys the cigarettes that makes the product elastic or inelastic. Youth tend to have less disposable income than adults. Therefore, cigarettes are more elastic to youths. Cigarettes are inelastic to adults and a price change won’t affect them because they have smoked longer and it is harder for them to quit as well as they have more disposable income. If I was an economic adviser to the Health Minister I would recommend a price and tax increase on cigarettes to stop youth and adult smoking. I would also suggest more advertisement against smoking and educating people from a younger age. 4. If prices on cigarettes are raised, the government might benefit from taxes because it is very hard for many people to quit their addiction to nicotine.
1. Concept of elasticity: the responsiveness of quantity demanded due to a change in price. If a product was said to be elastic that means the % increase in price is affecting greatly on the % change of demand (decreasing). If a product was said to be inelastic that means the % increase in price is not really affecting on the % change in demand, still enabling the owner to make revenue.
2. Cigarettes are an inelastic product in the video because a 10% increase in price will cause a 7% drop in demand which is smaller than the price increase giving owners opportunities to still able to earn revenue.
Price changes (increases) in cigarettes might be able to stop some youth from purchasing but it probably is not likely to stop adults from buying. This is the case because adults tend to earn more income and a 10% increase in price may not be much a difference to them whilst a 10% increase in pricing for cigarettes may cause youths to think twice before purchasing. Also, compared to the youth, adults probably have been smoking for a longer time and are more addicted than the youth which causes them to have a bigger tendency to make a purchase.
If I was the economic adviser to the Health Minister, I would help recommend the youths and adults to stop smoking by advising the harmful effects of cigarettes after intake and raise tax prices which make cigarettes less affordable.
3. If prices on cigarettes are raised the government benefits from the taxes earned from them.
1) Elasticity is how people react to the changes and measures the sensitivity or responsiveness of quantity demanded to change in product price. The equation form is the elasticity demanded is equal to the percentage change in quantity demanded over the percentage change of price.
ReplyDelete2) Cigarettes are inelastic because even though the price may increase, consumers will still purchase this product because it’s a drug addiction. As a health advisor to the Health Minister I would ban the sales of tobacco and reinforce strict laws to prevent smoking, such as fines and jail time. Also, advertise during television shows and have more health awareness classes available to society. Other than that, there is not much I can do because of the addiction that comes from tobacco.
3) If the price on cigarettes were raised the tobacco companies would benefit because no matter what consumers will still be willing to pay the extra couple of dollars to feel relaxed. Also, the government will benefit because of the taxes.
By: Matthew Jiu, Joshua Tran and Arvinder HUNDAL
Elasticity of Demand
ReplyDelete1. Explain in simple terms, the concept of elasticity.
Basically, the concept of elasticity calculates how the change in price of a product would affect the quantity demanded from the product by the consumers.
2. Are cigarettes an elastic or inelastic product? Explain your answer. Why might price changes not stop people from smoking? You are the economic adviser to the Health Minister – what would recommend to stop youth and adult smoking?
Cigarettes are an inelastic product, due to the fact that prices changes do not affect the quantity demanded. Prices will not stop people from smoking, because cigarettes have an addicting factor to it and smokers believe that they are a necessity to them. To stop youth and adult smoking, it would be advised to ban the selling of cigarettes entirely.
3. If prices on cigarettes are raised, who benefits?
If the prices on cigarettes were to be raised, the manufactures of the cigarettes, distributors of the product and the government, based on tax revenue, would benefit from this.
By: Joshua Thang, Benny Chow, Jimmy Chen, Michael Hoang.
Basically, elasticity reveals the consumer reaction of the quantity demanded of a good or service whenever there is a change in price. If the quantity demanded of a product either drops or rises, it is an elastic product. However, if the consumers continue to purchase a good or service no matter the price, it is an inelastic product.
ReplyDeleteCigarettes are an inelastic product especially for people who have been smoking for a long period of time. Prices might not stop people from smoking. Since cigarettes are highly addictive and get people hooked, a price change alone is not enough for people to give up the habit.
If I was the economic adviser to the Health Minister, I would recommend drastically raising the prices of cigarettes as well as lowering the prices of products which help people quit smoking. That way, people will consider quitting if it's a lot less cheaper than smoking and killing their lungs.
If the prices on cigarettes are raised, I think that the tobacco companies would benefit the most because of the high number of people who continue to purchase cigarettes no matter the price.
Lorena Laurencelle
2. Elasticity of demand measures the responsiveness of quantity demanded to change in the product price. It is the reaction of how people react toward the change in price.
ReplyDelete3. Cigarettes are an inelastic product because even though the prices increase, people are addicted and are sometimes pressured to smoke that’s why price increase doesn’t stop people from smoking. I would recommend that the government should make a law towards a certain age allowed to smoke as well as limiting places that are allowed to sell cigarettes.
4. If prices on cigarettes are raised the producers, wholesalers as well as retailers benefit.
Wilson Yao & Cathy Tran
2. Explain, in simple terms, the concept of elasticity.
ReplyDeleteIt is the tolerance to price changes and how it affects the quantities demanded. The more elastic the product is, the more likely that poeple would react to greater price changes. Such as, if LV had a 50% off sale, chances are people will rush to LV and get 10 bags. (Even though this will never happen in real life) On the other hand, if the product is inelastic, people are less likely to react even if prices are going up. For example, if heating costs are going up, people are still likely to use approximately the same amount, because heating is a necessity for the home.
3. Are cigarettes an elastic or inelastic product? Explain your answer. Why might price
changes not stop people from smoking? You are the economic adviser to the Health
Minister – what would recommend to stop youth and adult smoking?
Cigarettes are inelastic, because even if the price increases, the quantity demanded does not significantly decrease. Price changes do not stop people from smoking because smokers are too addicted to change their habits and quit smoking. If we were the economic advisor to the Health Minister, we would recommend they raise prices on cigarettes and advertise the dangers and risks of smoking more often.
4. If prices on cigarettes are raised, who benefits?
If prices are increased, cigarette companies are most likely to benefit because the number of long time smokers are not likely to change, and therefore, revenue would increase as these consumers continue to purchase the same amount.
Annie Chen, Claudia Pang, Janice Savage
1.) Elasticity is how people react to price changes. If a product is elastic, then people will be sensitive to a price change. If the price change is increase too much, people may cut back on purchases and you lose revenue. If a product is inelastic, then even if the price is increased, people will still buy the product. The formula to figure out elasticity is Ed (Elasticity of Demand) = percentage changed in Quantity demanded over the percentage changed in Price.
ReplyDelete2.) Cigarettes are an inelastic product. This is because, even if price changes were increased, the over all sales of cigarettes wouldn’t go down because people wouldn’t react to the price increase. Price changes wont affect whether people buy the product or not because they are addictive. People who are addicted won't quit unless they have the will to quit. If i was the economic adviser to the Health Minister, I would suggest to raise prices on cigarettes to youth because they would be more inclined to stop because they wont have enough money to keep up the habit. I would also suggest giving free products to youth in schools to help quit them smoking.
3.) If the price on cigarettes are raised, the manufacturers who produce the cigarettes, and the government would benefit. The manufacturers would benefit because people would still buy the products even at a raised price from being addictive, and the government would see more tax revenue from the higher prices.
Jessica Pirson
Smoking Cigarettes is a challenging addiction to overcome, which is why cigarettes are considered to be an inelastic product. Elasticity is defined as the consumers' response to the change in prices of certain products. In this case, if prices of cigarettes increase, people would be willing to compensate for the difference in cost because they are addicted. The increase in prices and the insignificant change in quantity demanded helps increase overall revenues of the cigarette companies.
ReplyDeleteIn order for the Health Minister to successfully accomplish their goal of stopping youth and adults from smoking, it would be wise to immensely increase the price of cigarettes. It is crucial to increase the price of cigarettes by a large margin instead of slowly increasing it. Smokers may be more accustomed to the slower increase in prices, which would not stop adults from smoking, as opposed to a rapid increase in prices.
1) The concept of elasticity has many terms that define its concept. The first term that is essential is quantity demanded. Quantity demanded can be defined as an amount of a demanded product or a service by the people. Another crucial term to understand is elasticity of demand and this term can be defined as stated by Mary on her channel mjmfoodie “demand measures the responsiveness of quantity demanded to a change in the product price”. Basically elasticity of demand is the % change of demanded over the % change over price. Now we have knowledge of the two essential terms but there is the natural law of demand and could be understood by saying, raising prices will drop demand. To understand the concept of elasticity more thoroughly there would have to be an example. An example of this concept is the price change in textbooks from the price $100 to $101 causes a small change in elasticity.
ReplyDelete3) Cigarettes are inelastic products because people who are hooked on cigarettes will continue to buy them regardless of price changes. I would recommend the Health Minister to focus on educating people about the negative health effects that smoking causes. I would also advocate for laws that ban smoking.
4) If the prices on cigarettes are raised, cigarette manufacturers would benefit because people would still be buying cigarettes but at higher prices. The government would also benefit because of taxes.
-Benny C.
-Justin
Economics 12
ReplyDeleteElasticity of Demand
1.Watch the video on elasticity @ http://www.youtube.com/watch?v=4oj_lnj6pXA
2.Explain, in simple terms, the concept of elasticity.
3.Are cigarettes an elastic or inelastic product? Explain your answer. Why might price changes not stop people from smoking? You are the economic adviser to the Health Minister – what would recommend to stop youth and adult smoking?
4.If prices on cigarettes are raised, who benefits?
Answers
2. Elasticity is how sensitive a customer is to a price change in a product.
3. Cigarettes are both elastic and inelastic, but it depends on who buys the cigarettes that makes the product elastic or inelastic. Youth tend to have less disposable income than adults. Therefore, cigarettes are more elastic to youths. Cigarettes are inelastic to adults and a price change won’t affect them because they have smoked longer and it is harder for them to quit as well as they have more disposable income. If I was an economic adviser to the Health Minister I would recommend a price and tax increase on cigarettes to stop youth and adult smoking. I would also suggest more advertisement against smoking and educating people from a younger age.
4. If prices on cigarettes are raised, the government might benefit from taxes because it is very hard for many people to quit their addiction to nicotine.
Elena Jiang Su
1. Concept of elasticity: the responsiveness of quantity demanded due to a change in price.
ReplyDeleteIf a product was said to be elastic that means the % increase in price is affecting greatly on the % change of demand (decreasing). If a product was said to be inelastic that means the % increase in price is not really affecting on the % change in demand, still enabling the owner to make revenue.
2. Cigarettes are an inelastic product in the video because a 10% increase in price will cause a 7% drop in demand which is smaller than the price increase giving owners opportunities to still able to earn revenue.
Price changes (increases) in cigarettes might be able to stop some youth from purchasing but it probably is not likely to stop adults from buying. This is the case because adults tend to earn more income and a 10% increase in price may not be much a difference to them whilst a 10% increase in pricing for cigarettes may cause youths to think twice before purchasing. Also, compared to the youth, adults probably have been smoking for a longer time and are more addicted than the youth which causes them to have a bigger tendency to make a purchase.
If I was the economic adviser to the Health Minister, I would help recommend the youths and adults to stop smoking by advising the harmful effects of cigarettes after intake and raise tax prices which make cigarettes less affordable.
3. If prices on cigarettes are raised the government benefits from the taxes earned from them.
By: Lucy Liu, Linda Zheng, Shirlene Hsiao