Question

Using demand and supply curves, show the effect of each of the following on the market for cigarettes.

Answer 1

There are different aspects of demand curves. The answers is below;

• A cure for lung cancer is found: The demand curve, in this scenario, will shift to the right along as the cure for lung cancer is found which will also increase or move right.

• The price of cigars will also increases and the demand increases while the curve moves to the right

• Wages will also increase in states that grow tobacco, while the supply will decreases and the curve will moves left.

• A fertilizer that increases the yield per acre of tobacco is discovered, this will make supply increases and the curve moves to the right.

• There is a sharp increase in price of matches, lighters, and lighter fluid, This will make the demand decreases and the curve to go left.

• More states pass laws restricting smoking in restaurants and public places, this will make demand decreases and the curve to go left.

Demand curve

The demand curve is known as a curve that helps to give all the possible combinations of the price and quantity demanded of a product or service at a given time and in a graphically manner.

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