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Essay On Cigarette Smoking

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The consumption of tobacco and cigarette advertising is an age old problem worldwide. The new concern is based on the high rate at which young people are taking on this bad habit. Now more than ever, it has become a major health risk, not only to smokers but to young people as well. The use of cigarettes have many significant negative externalities of consumption and have been criticized for decades. The figure below shows to what extent the consumption of tobacco affects the society through its externalities that add to public/social costs. The graph clearly shows that the marginal social benefits curve is far below that of the marginal private benefits curve. It also shows that with the addition of a tax, the quantity of cigarettes consumed decreases drastically and the price of a pack increases. (Q1 decreases to Q2, and P1 increases to P2)

Only now, the government turns to reform in the production of cigarettes as a way to reduce the demand. This reduction in demand would push the demand curve back and in turn lower the supply of tobacco. This act is being heavily debated...
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