20202086

Md Rakibul Islam

How many factors are available of price elasticity of cigarette? Also, you have to mention some factors
outside of this topic.

The price elasticity of demand one the influential factors of the increasing in the quantity of products
demand in relation to its change in price. It helps to understand us how supply and demand changes and
how economy work on price changes.

If goods are inelastic, then price don’t change much, and demand and supply also don’t change so much.
For instance, people need fuel to go to their work or visit outside the country or around the world.
Rather fuel oil price is increase, individuals like to buy exactly same amount of fuel because of their daily
travel or work necessity. On the other hand, other goods if they are potential, it causes drastic changes
in their demand and supply because of the price changes.

Since smoking is a propensity so difficult to kick, demand for cigarettes is exceptionally inelastic -
implying that enormous value changes actuate just little changes in the amount requested.
Proportionately, just huge cost expands (diminishes) will contract (stretch) request because the interest
is inelastic to value changes. As Cigarettes demand is inelastic, if price will increase the demand as well
will not change so much because of elasticity.

Smoking is a habit where people mainly consumed Cigarette. Social, economic, psychological, and
cultural factors that influence people for smoking. People make smoking as their habit because of
different reasons like-

• Unemployment, low income, economic crisis on family. Cigarette become a necessity product
when someone addicted on it. If he or she addicted on smoking, anyhow he or she must buy cigarette.
That’s reason cigarette consumption is increasing day by day. If price is rise or tax impose by
Government, potential buyer still consumes it. If income is low but when it becomes necessity, buyers
must buy this reduce some other’s products cost as well. That’s why income also not so much impacted
on Cigarette and it creates price elasticity of Cigarette. And demands become inelastic. Unemployment
rate also an important factor of price elasticity of Cigarette. When people become more unemployed,
falling on stress that time they don’t have real thinking what is right or wrong. They just work on peer
pressure and as well as to reduce their mental stress they addicted themselves on different drugs,
tobacco, marijuana etc. Different drugs and tobacco are more expensive and unavailable compare than
Cigarette. And price is also lower than other substitute product, that’s why consumer is more consumed
that Cigarettes and it creates inelastic demand in market. cigarette has different brands in market, and
consumers able to choose their brand on price.