Which of the following is a possible reason for the price elasticity of demand for cigarettes being large for young smokers?
A)They have large discretionary incomes.
B)The price of cigarettes has increased recently.
C)They are no longer permitted to smoke in public.
D)Cigarette advertising on television has been banned.
E)The proportion of income a young smoker spends on cigarettes is usually quite large.

Question

Quizplus · Accepted Answer

Young smokers typically have lower incomes and spend a larger proportion of their income on cigarettes compared to older smokers. Therefore, a price increase in cigarettes would have a larger impact on their purchasing decisions, resulting in a relatively large price elasticity of demand.

Which of the Following Is a Possible Reason for the Price