How does the price elasticity measure shed light on the publ

How does the price elasticity measure shed light on the public policy issue or debate (in regards to cigarette pricing)?

Solution

When change in quantity demanded is measured with respect to change in price of the commodity, it is called Price Elasticity of Demand.

Demand for those commodities which have substitutes ( for example, tea has its substitute in coffee, orange juice has its substitute in lime juice) are relatively more elastic.

Commodities having no substitutes like cigarettes, liquor etc. have inelastic demand. The reason of inelastic demand in case of cigarettes, liquor etc. is that with respect to change in price of these commodities, there will be no change in quantity demanded. Futher the people consuming cigarettes, liquor etc. are accustomed or habitual as they need these commodities at any price (whether high or low). Therefore, These commodities will always have inelastic demand. Change in price evokes no response in demand.