Should the fizzy drinks market be regulated or left to the free workings of the market?

This question is asking about the demerit good of fizzy drink consumption. this consumption leads to a negative externality (external cost to society) - this could be added cost to NHS from the increased likelihood of fillings and diabetes.Regulation + - should reduce consumption through increased prices (consumer/producer burden) and /or decrease production -unintended consequences and possibility of government failure so Free market + - Adam smith - invisible hand = optimal -doesn't take into account behavioural economics

MB
Answered by Matt B. Economics tutor

1717 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How best to answer a question on how negative externalities lead to market failure.


Discuss how lower interest rates can affect an economy such as the UK.


What is the Aggregate Demand in an economy?


What is Quantitative Easing and evaluate how it impacts an economy?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning