Blogging about Elasticity and Revenue

For this blog I'd like touch on the issue of smoking, and how the elasticity of the product effects the total revenue. In this editorial response I used as my source; not only does is speak on the trends in smokers getting younger and younger (and how this is a bad thing) but also how that effects the price and demand.

The younger the smoker, the higher the damand for the product; they have to have their fix, although they may not be willing to pay the higher price. Yet the prices may be lower, the total revenue increases as the damnd is high.

In my graph of totally made up figures, it states that as the price stays more reasonable, the product is more elastic. The unitary elasticity is set at 25. The product becoomes inelastic as prices are higher climbing toward $100 a pack.

The total revenue climbs as the prices are more reasonalble and demand is still high (even among those older smokers trying to quit who still smoke on occasion). Total Revenue falls as prices are raised.

Link to my article:
http://search.proquest.com.libresources1.sait.ab.ca/canadiannews/docview/351846053/1394ADFE2344D10617E/3?accountid=13652