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INTRODUCTION TO ECONOMICS ESSAY IN MICROECONOMICS - THE ECONOMICS OF SMOKING- Word Count: 1477 a) Many factors have a part in determining demand for cigarettes in the UK. However, price is the most important factor. Price will affect the position of the equilibrium along the demand curve. If the demand curve was to be drawn, elasticity of demand curve would have to be considered. This is a standard downward sloping demand curve. When the price of a good rises, the demand for it falls. However, for some goods such as necessity items, the demand curve looks like this. This is an infinitely inelastic demand curve where however much the price changes, the quantity demanded remains the same, i.e. at Q*. This is an infinitely elastic demand curve where the slightest change in price can alter the demand. Though cigarettes are essentially a luxury item, the elasticity of the demand curve is unlikely to be an extreme situation....

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