The UK government are planning on imposing a tax on sugary drinks. Discuss how a tax could be used to decrease consumption of sugary drinks and outline some potential issues.
Gov should try place monetary value on welfare loss - this may be difficult tax would increase cost of production for firms - they supply less (shown on supply and demand diagram)tax would deter customers from buying as much sugary drinks as they are now more expensive (demand decreasing on diagram) issues- inelastic demand admin costs hard to place monetary value on welfare loss
AA
Related Economics A Level answers
All answers ▸What would be the economic impacts of a decrease in the tax rate for all tax brackets? Use the idea of aggregate demand your answer.
Consider Donald Trump chooses to raise import tariffs on Chinese Goods, what will be the impact on the US macroeconomic environment?
Explain the macroeconomic effects of tariffs
What are tariffs and why are they used?