Valuing Big Tobacco, Part V - Seeking Alpha - 0 views
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Landon F on 17 Oct 12This article is interesting because it talks about the inelasticity of tobacco. The article says that if the elasticity of demand is between 0 - 1 then it is inelastic and tobacco is 0.61. What this means is that although the price may change for tobacco, the demand remains relatively stable. This is cause for a lot of fluctuation because retailers realize they can change the price is maintain a demand. However, if the price were to increase drastically, this could bring the elasticity of demand above 1 and cause it to become elastic.