Supply and Demand Curve in Tobacco Industry - 2004 Words

Economics Report and Demand amp; Supply curve Of cigarettes in Australia Introduction: Recently, there has been a new trend in the tobacco industry in Australian society due to the increased prices of cigarettes, mainly for the reason that â€Å"with more than 3.1 million people still smoking today, tobacco still being the leading cause of death by a wide margin†¦ â€Å" (Scollo amp; Winstanley, p.xiii, 2008). Therefore, this report will illustrate the market structure of Australia tobacco industry, and then make analysis about the price chances on the demand and supplies for cigarettes. The third and the fourth part of the report are about the impacts of this change and some government policies for the tobacco industry, respectively. The†¦show more content†¦BATA’s major brands in Australia are Dunhill, Winfield and Benson amp; Hedges. Its success is due to higher margins, reductions in overheads and improved supply chain efficiencies, and strong performances by its key brands, Winfield, Dunhill, Benson amp; Hedges and Holiday. (Scollo amp; Winstanley, 2008, p.12) Philip Morris (Australia) Ltd (PMA) is the Australian subsidiary of Philip Morris International (PMI), accounts for approximately 34% of the national market. Its locally manufactured cigarettes are Alpine, Longbeach, Marlboro and Peter Jackson. Imperial Tobacco Australia Ltd (ITA) is the smallest and most recently formed of the tobacco companies in Australia. ITA’s overall market share in Australia is about 18% with the major brands: Brandon, Escort, Horizon, John Player Premium and Peter Stuyvesant. However, although the products in this industry are very similar as they are cigarettes, the companies just differentiate their products by creating different brands with different packaging and names. The price competition does not significantly exist in the industry as these companies are price makers rather than price takers. In addition, the entry into the industry is quite difficult because of three big companies with high competition, GovernmentShow MoreRelatedThe Tobacco Market Of The United Kingdom Essay1115 Words   |  5 PagesThe aim of this essay is to illustrate how the markets will react when the government step in. This essay shall focus on the tobacco market in the United Kingdom through an organisation known as Phillip Morris International Limited. The first section of this essay provides the background and characteristics of this organisation in the United Kingdom division. This is followed by the justification of the applicable market structure. This essay highlig hts some of the reasons for government interventionRead MoreThe Demand And Supply Model1601 Words   |  7 PagesA: The demand and supply model is the representation of the demand in comparison with the effects on the price of the product or the service, the demand and supply model is the backbone of economic analysis and involves the measure of price elasticity and the shifts/ demands these events cause to the demand and supply and the effects on substitutes and compliments of the good or service as well as finding price and supply equilibrium. The particular article explores the excess demand of chocolateRead MoreHow The Cigarette Industry Affects Society With Disease And Reduces Social Economic Welfare1142 Words   |  5 PagesThe cigarette industry is known to cause market failure. It burdens society with disease and reduces social economic welfare. These negative externalities are thought to far outweigh any economic benefits that the industry yields (Guhl Hughes n.d). To combat this, governments implement indirect taxes with the aim of reducing the number of smokers. Evidence shows that t his has been the most effective means of reducing demand for cigarettes (Cotter, Dunclop Perez 2011). In the context of the competitiveRead MoreMicroeconomics Essay- Suppose the Government Raises the Legal Drinking Age in the Uk from 18 to 21. Conduct an Economic Analysis of This Policy to Examine Its Impact on Affected Markets.1260 Words   |  6 Pagesexamine its impact on affected markets. With reference to the above statement, if the UK government were to increase the legal drinking age from 18 to 21 there are two markets that would mainly be affected- the producers, which is the alcohol industry as a whole and the consumers who are the UK citizens between the age of 18 and 21. A market is a group of buyers and sellers of a particular good or service.(Mankiw) Alcohol is a demerit good. These are goods that are over-produced and over-consumedRead MoreThe Price Increase And Demand Model2215 Words   |  9 Pagesprice increase of garlic in China in 2009 can be explained by the supply and demand model. Perfect competition is evident in the agricultural industry, as there are many producers who act as price-takers. In the previous year, low prices discouraged farmers from continuing to plant garlic crops. Many farmers turned to growing produce that they believed would be more profitable and hence, garlic supplies declined. The supply curve shifted to the left (S_1 to S_2 below), causing a slight increase inRead MoreAnalysis of an Excise Duty: the Policy of Tobacco Taxes in Germany4204 Words   |  17 PagesStrà ¶bel - Analysis of an excise duty: The policy of tobacco taxes in Germany Analysis of an excise duty The policy of tobacco taxes in Germany Master of Business Administration (MBA) Module: Assignment: Course Instructor: Economics 1/2 Dr.rer.pol. Markus Wilhelm Author: Daniel Strà ¶bel 1 Daniel Strà ¶bel - Analysis of an excise duty: The policy of tobacco taxes in Germany Executive Summary Aim of this work is to analyse tobacco tax in Germany and find out under which circumstancesRead MoreEconomics And Economics On Economics Essay1142 Words   |  5 Pagesthat we will dive into is supply, demand and prices. Supply is the willingness to offer good and services at a given price. The supply curve shows the amount of a product that producers will make available for sale. The main law of supply is that if all things are equal as the price rises the quantity supply rises and vice versa. As price fall so should the quantity supply fall. When it comes to movement along the curve, as the law states, movements up and down the curve are caused by change e winRead MoreSupply and Demand and Mickey Mantle Baseball1016 Words   |  5 Pagesthe quantity demanded and a decrease in demand for Mickey Mantle baseball cards. Give a possible reason for change in each graph. Decrease in the quantity demand of Mickey Mantle Baseball cards. The reason is that the price increase. Decrease in demand for Mickey Mantle Baseball cards. The reason may be taste and preferences. 4. Draw graphs to illustrate the difference between a decrease in quantity supplied and a decrease in supply for condominiums. Give a possible reasonRead MoreTobacco Excise Tax in Australia1796 Words   |  8 Pagestax has impacted on a list of stakeholders who are all were are all impacted, such as the Government, the National Health System/ Department of Health and Aging, Consumers amp; Retailers, Manufactures of tobacco products, cigarette companies and service companies relative to the tobacco industry. Aiming to reduce smoking in the long term, the Government’s tax has been estimated to reduce smoking by 6% (870000)(ABC 2010), which would be significantly beneficial to national health. In supplementingRead MoreEssay on Economic Tools and Concepts1606 Words   |  7 Pageshealth care costs, declining health of Americans, and decrease productivity among workers (Preventive Medicine, 2009). The goal of this paper is to discuss the various economic tools and concepts such as supply and demand curves and price elasticity, and marginal analysis in the managed health industry. The government has poured about 75%-80% of money dedicated to health care in treating not curing or preventing diseases such as hypertension, cardiovascular disease, and diabetes. The Centers for Disease