One reason why the price elasticity of demand for cigarettes is large for young smokers is that
A) they have large discretionary incomes
B) the price of cigarettes 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 limited incomes, meaning that the proportion of their income spent on cigarettes is often significant. As a result, even small changes in the price of cigarettes can have a large impact on their demand. This makes the price elasticity of demand for cigarettes among young smokers quite high.

One Reason Why the Price Elasticity of Demand for Cigarettes