Article Analysis: Tobacco Consumption Patterns Introduction Tobacco consumption patterns have been fluctuating continuingly ever since the first determined need was made. Tobacco is widely used for a number of different products. Most commonly known use of tobacco is in the manufacturing of cigarettes. To understand the consumption pattern of tobacco, a person must know a few key ideas in business. A person must know what economics, microeconomics, law of supply and demand, and factors that influence the law of supply and demand.
After this analysis the information will demonstrate the consumption patterns of tobacco in a clear format. Economics “Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society. One of the key words in the definition of the term “economics” is coordination. ” (McGraw-Hill Companies, 2008, p. 1). Human beings still have a desire for tobacco. Thus, the desire will create an economic dimension to the product. While in developed countries tobacco smoking is set to continue to decline, in developing countries consumption will increase, the report said (Projections of tobacco production, consumption and trade to the year 2010). ” (Northoff, 2008) Thus the need for tobacco is still constant and the economics to this product are still in place. Microeconomics “Microeconomics is the study of individual choice, and how that choice is influenced by economic forces. Microeconomics studies such things as the pricing policies of firms, households’ decisions on what to buy, and how markets allocate resources among alternative ends. (McGraw-Hill Companies, 2008, p. 14). The price of cigarettes is a lot more than 10 or twenty years ago, but so are a lot of items due to inflation. But the demand for cigarettes has changed dramatically. At one time cigarettes were so popular that they were advertised on television, smoked in hospitals, and deemed harmless by the medical professionals. As time went on and the harmful effects of cigarettes were discovered and introduced to the populace, the demand changed from high to low at least in the developed countries.
In less developed countries, the price of human life is so devalued even though the notion that cigarettes are harmful the demand is still great. Law of supply “The law of supply states: Quantity supplied rises as price rises, other things constant. Or alternatively: Quantity supplied falls as price falls, other things constant. ” (McGraw-Hill Companies, 2008, p. 88). This law would also apply to tobacco. “World tobacco production is projected to reach over 7. 1 million tonnes of tobacco leaf in the year 2010, up from 5. 9 million tonnes in 1997/99.
This is lower than the record tobacco production of 1992 of 7. 5 million tones” So at times when the need for something is high then the base supply to make that item will rise, also. Factors that lead to a change in supply There are many factors that can lead to a change in supply from war to environmental factors. For cigarettes a large change in supply would be the demand of the product. Once laws were passed to make it illegal to smoke in some public areas and lawsuits forcing big tobacco companies to show informational advertisements telling the consumers the harmful facts about cigarettes.
The general market for consumers dropped in developed countries, but at the same time in developing countries cigarette consumption increased due to larger populations and incomes. According to Northoff , 2004 “While in developed countries tobacco smoking is set to continue to decline, in developing countries consumption will increase, the report said (Projections of tobacco production, consumption and trade to the year 2010). ” Law of demand “The law of demand states: Quantity demanded rises as price falls, other things constant. Or alternatively: Quantity demanded falls as price rises, other things constant. (McGraw-Hill Companies, 2008, p. 82). This law will apply to tobacco as well. “The number of smokers is expected to grow from 1. 1 billion in 1998 to around 1. 3 billion in 2010, according to the report. This is an increase of about 1. 5 percent annually. ” The percentage of people on the planet that smoke remains the same or drops but at the same time the number of people of the planet grows. Thus, the demand for cigarettes still grows and will continue to grow until the percentage of people that smoke is less than the grow of the population.
Factors that lead to a change in demand According to Northoff, 2004 “Applying an aggressive anti-smoking and anti-tobacco policy, tobacco consumption per person could even drop by 20 percent, FAO said. Consumption per person is declining in developed, and modestly declining in developing countries, including China. ” There are many factors that lead to a change in demand. For cigarettes, the new information that is introduced to the educated customer will help them make wiser decision making choices to not buy cigarettes cause they are bad for the consumer.
Less-educated consumers in less developed countries that do not have the advantage or the abilities to watch these anti-smoking advertisements may find that there percentage to start or continue smoking is still there. Thus the demand for the addictive product is either the same or increasing. Less developed countries also grow faster in population thus also increasing the demand for cigarettes. Conclusion Tobacco consumption patterns are stilling fluctuating continuingly. There are a lot of factors that influence the economics of tobacco.
It is interesting to learn from this model the key concepts of business. Hopefully, the demand of tobacco continues to drop to help create a better way of life for everyone. References: McGraw-Hill Companies. (2008). Economics- 7e. Retrieved October 30, 2008, from University of Phoenix, Week One, ECO365. Northoff, Erwin. (2004). FAOnewsroom. Higher world tobacco use expected by 2010 – growth rate slowing down. Retrieved October 30, 2008, from http://www. fao. org/english/newsroom/news/2003/26919-en. html