Blog
The Elasticity Classic - Smoking
Jim Riley
9th March 2011
This has to be the most widely used example in classrooms up and down the country when discussing price elasticity of demand.
How about this little twist on it?
The standard argument goes that the PED for smoking is relatively inelastic, but is this the case for all smokers?
Show this Sky News story (includes a video clip) to your class and you will be able to discuss how the PED for a committed smoker may actually be different to that of a young person who is considering taking up smoking.
There is also the opportunity to reinforce the areas of price creating movements along curves and all other factors causing shifts.