During the Great Plague of 1665 in London, medical experts claimed that smoking tobacco would prevent...

During the Great Plague of 1665 in London, medical experts claimed that smoking tobacco would prevent a person from catching the disease. Even school children were ordered to smoke during class, and one boy at Eton was whipped for refusing to smoke. What effect did this have on the market for tobacco? Use a supply and demand diagram to explain.

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Expert Solution

When medical experts claimed that smoking tobacco would prevent a person from catching the disease. Even school children were ordered to smoke during class, and one boy at Eton was whipped for refusing to smoke then the demand for tobacco will increase at all price level because people will have to consume tobacco to prevent catching from the disease . Therefore it will shift the demand curve to the right indicating the increase in demand at all price level.

in the below, the original demand is D and supply is S . the market is equilbruim is E , where price is P and quantity demanded is Q. after the medical expert claimed. the demand curve shifts to the right from D to D1 and new equilbruim at E1 and Price is P1 and quantity demanded is Q1.

Rahul Sunny answered 2 years ago

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