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MASTER OF MANAGEMENT
BEM5013
INDIVIDUAL ASSIGNMENT
Questions:
1. Demand shifters
a. Income
b. consumer tastes
c. advertisement
d. Supply shifters
2. Supply shifters
a. number of firms that enters the market
b. producer expectations
c. excise tax
d. technology or government regulations/rules
= 17%/10%
= 1.7
E>1
Hence, it is elastic. The increase in cigarette price had greater
impact amongst the poor based on the above study.
= 4%/10%
= 0.4
E<1
Therefore, the impact of price increase to the smokers from the
rich families was
not significant, hence, it is inelastic to the rich.
5. How do you analyze smoking through economic thinking?