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 ▸

Can you explain the multiplier effect?


Is there a way to find out a nouns gender?


To what extent can government policies be used to increase economic growth without increasing the rate of inflation


why is the profit maximising output where marginal cost (MC)= marginal revenue (MR)?