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The estimated demand function for a pack of cigarettes in Jacksonville is:

A. 115 - 10
B. 115 + 10
C. 30 - 35
D. 30 + 35

Answer :

Final answer:

The higher price elasticity of demand among teenage smokers compared to adults suggests that price interventions such as tax increases may be more effective in reducing smoking rates in this demographic.

Explanation:

Understanding the price elasticity of demand for cigarettes, particularly among teens, is crucial in formulating policies aimed at reducing smoking rates. The price elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Studies have found that the elasticity of demand for teen smokers ranges between -0.9 and -1.5. This indicates that a 1% increase in cigarette prices could lead to a reduction in demand by 0.9% to 1.5%. With such elastic demand, measures like tax increases can be particularly effective.

To achieve the goal of reducing cigarette consumption, strategies might include shifting the relatively inelastic demand curve to the left with public health initiatives such as anti-smoking campaigns, alongside economic instruments like tax increases.

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