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?

Answer 1

Nicotine in cigarettes is in fact addictive. Producers of cigarettes offer free samples to young adults with the purpose of engaging them with the product. Directly it will increase dependence on the cigarettes which leads to higher sale levels for the producers and along with this, higher revenues.

Answer 2

If the nicotine cigarettes are highly addictive and they were to offer the free samples to young adults then it will make the people be highly addictive in the nicotine cigarettes and this will cause the economy in the producers to have a less demand in elasticity. If it has a less elasticity, then it will cause a large price change, affecting the consumed quantity by the consumers.