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
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