(a)[3]
How far does the data in Fig. 1 support the normal demand curve relationship between the price and the quantity demanded of cigarettes?
(b)[7]
- What do the three elasticity values in Table 1 indicate about the demand elasticity for cigarettes? [3]
- What could account for these different elasticity values? [4]
(c)[4]
Explain two possible economic reasons why cigarettes are taxed heavily.
(d)[6]
Discuss the possible economic consequences if cigarette smoking were made illegal.