Question

If nicotine in cigarettes is highly addictive, why would it make economic sense for producers of cigarettes to offer free samples of their products to young adults?
a. The free samples will make demand more elastic in the long run.
b. The free samples will teach young adults there is such a thing as a free lunch.
c. The free samples will help get people addicted to nicotine, which makes demand less elastic.
d. The free samples will make supply less elastic so people know there will be cigarettes.

Answer 1

Answer:

The correct answer is option c.

Explanation:

Providing a free sample of cigarettes is a strategy adopted to ensure that the demand becomes less elastic in the future. As nicotine in cigarettes is addicted, providing free sample to people will make them addicted to cigarettes. When people get addicted they will consume despite an increase in price. This makes demand less elastic. Less elastic demand means more profit for businesses.