Essay Tobacco and Tobacco Market Results

Submitted By jdeleon823
Words: 659
Pages: 3
Open Document
The U.S. government regulates the sale and distribution of tobacco products in many ways. Some examples of the way the government regulates are setting an age limit and taxing tobacco products. In the economic world, the tobacco wars are a serious issue. The sale of tobacco as we know is very inelastic.

The government puts heavy taxes on tobacco products to cut down on the sale of them. They know that the people will buy cigarettes no matter how much they cost. Elasticity has a lot to do with the taxation of cigarettes. The relatively low price elasticity of demand in the tobacco market results in higher tax revenues than in any other type of market. The government knows that the demand of tobacco is high enough that they can apply these stiff taxes. Cigarette taxes work as a steady source of revenue for the government. There will be some people that will stop smoking, but there will always be those people that will not. The demand will always still be there unlike other market products.

Another reason why the government wants to regulate the sale of tobacco products is to cut down on the number of underage smokers. All throughout the United States you must be eighteen years of age to buy a pack of cigarettes or any other tobacco product. The government does not want the youth to start smoking at an early age because of the higher risks of cancer and other smoking related problems. They know how addictive tobacco is and how hard it is to kick the habit once you have started. There have been many studies showing that people who smoke cigarettes are more likely to die from such diseases as cancer, emphysema, and asthma. On every single pack of cigarettes there is always a Surgeon General’s warning on it. This warning is used to let society know that there are consequences to smoking.

Anti-trust regulations also have a great deal to do with the sale of tobacco. Tobacco companies tend to practice oligopolization. Oligopoly describes a market with only few producers and its entry into the market is relatively difficult. Government wants to control these private powers. Cigarette companies all work together to set their prices. If one company lowers or raises their prices the other companies will take notice of this and follow the other lead. From the early twentieth century tobacco companies have always had to deal with all types of anti-trust regulations. The laws are based on the principle of conserving and encouraging a free and
Show More

Related Documents: Essay Tobacco and Tobacco Market Results

Essay on Tobacco Industry Analysis

The tobacco industry involves companies that sell and produce tobacco products all around the world. Tobacco products include cigarette, cigar, pipe, and chewing tobacco. Tobacco smoking is “the single largest cause of preventable death and disease in our community.” (Tobacco. 2006) With a society becoming more prosperous, education is improving and a concern for quality of life is resulting in a strong anti-smoking sentiment on all levels of society. Therefore the present and future marketing activities…

Words 2162 - Pages 9

To Boycott Or Not To Boycott Stores

that sell tobacco products. The stores are offering the product however they are not forcing any of these consumers to purchase it. The company who makes the products, are making the customers buy the product by advertising and developing new ideas for new products to be produced. If society desires tobacco products to be banned they need to go to the company and take matters into their hands with the person in charge of the company. Another solution is to try to convince those who use tobacco products…

Words 521 - Pages 3

Essay about British American Tobacco (Malaysia) Sdn Bhd - Strategies Planning & Management

American Tobacco Malaysia, 10th April 2012). BAT (M) used this standard as a requirement to its employees’ behavior and honesty so that it can effectively prevent unwanted issues such as conflict of interest, corruption, insider dealing, whistle blowing and misuse of company’s resources. 3. Analysis 4.5 External Environment 3.1.1General Environment PESTLEI Analysis Sources: 1) British American Tobacco Malaysia, Regulation and Engagement 2011 2) British American Tobacco Malaysia…

Words 6381 - Pages 26

Phillip Morris Marketing Analysis Essay

- Financial Status - The Industry: Market Segmentation SWOT analysis…….……...……………………..…………….5 I. Introduction Background: To most, Philip Morris (PM), is only known as a dominant force in the manufacturing and marketing of cigarettes. However, over the past thirty years, as a result of numerous acquisitions and diversification strategies, PM has become a highly respectable participant in many markets. These markets not only include the tobacco industry but also the beer brewing, food…

Words 3770 - Pages 16

Batb: Marketing and British American Tobacco Essay

British American Tobacco PLC in the market of Bangladesh based on the factors influencing the marketing approach of the company. The report will also discuss about the differences between the promotional strategy applicable in the foreign market and that of the home market (UK). In order to do so, this report will compare the two marketing mix and explain the similarities and dissimilarities. Finally, the report will discuss about the macro environmental issues that British American Tobacco face in the…

Words 2316 - Pages 10

Tobacco Industry Essay

Secrets of the tobacco industry - Tobacco use is one of the biggest public health threats the world has ever faced. There are more than one billion smokers in the world. Globally, use of tobacco products is increasing, (decreasing in MEDCs, increasing in LEDCs) More than 80% of the world's smokers live in low- and middle-income countries. Tobacco related illnesses such as lung cancer and heart disease kills 5.4 million people a year - an average of one person every six seconds – Tobacco accounts…

Words 440 - Pages 2

Wk1 Article Analysis Essay

Article Analysis name University of Phoenix ECO 365 December 2, 2012 John Bayer Article Analysis The article in the USA Today News, Tobacco companies profit from loophole, market small cigars by Liz Szabo, identifies a new trend in cigarette consumption: “Smokers who switch from high-priced cigarettes to cheaper, but equally dangerous, small cigars (Szabo, 2012 ), when in fact, it was originally assumed by public health officials that signs indicated progress was being seen towards the goals…

Words 786 - Pages 4

How Did Tobacco Affect Virginia

swampy, preventing many things from being grown. The Virginians were about to give up when the natives introduced to them tobacco. Natives taught the settlers how to grow and use this weed. Without the discovery of tobacco, Virginia would have failed as a colony. There was never another resource or cash crop that was more important to the history of Virginia than tobacco. Tobacco really is the history of Virginia, spreading from Jamestown to the rest of the colony. Access Genealogy shows that "The…

Words 875 - Pages 4

BUSINESS AND ECONOMICS Smoking and Tax Essay

recommendation. Economics in one lesson In Hazlitt’s book of ‘Economics in One Lesson’, it has discussed the effects of governmental efforts to fix the price of commodities above or below the levels to which free market would otherwise have carried them. In a perfect free market, market price is the equilibrium price which when total demands equal to total supply. Many people, however, believe these fallacies because of man’s nature to see only the “immediate effects of a given policy, or its effects…

Words 1293 - Pages 6

Corporate Social Responsibility By British American Tobacco In Malaysia

American Tobacco in Malaysia * British American Tobacco Malaysia (BATM) was formed from he merger of Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad on 3 November 1999. * Today, British American Tobacco Malaysia is the clear market leader with approximately 63% market share, and ranks amongst the top 25 companies on Bursa Malaysia Securities Berhad in terms of market capitalisation. * British American Tobacco Malaysia manufactures and markets high quality tobacco products…

Words 1392 - Pages 6