Demand for junk food believed to be inelastic because these days junk food eating has become quite popular,especially in the younger generation on availability, convenience and relatively easy on price. They have become almost addictive to junk food and consumption would remain at the level used to even if prices go higher.
I would agree with a tax on junk food. Personally I think we should levy a very high tax on all of those, similar to the taxes paid on liquor and tobacco. Thoung taxing specifically on junk food seems to be injustice to market and create short term imbalance to market. But the long term benefits are – people will encourage eating healthy fresh food and discouraged to junk food over a time. When healthy food will be available at less cost than junk food, it is obvious that people will go for healthy. But along with taxing on junk food, government should create awarness people the ill-effects of junk foods. Because only taxing more will just increase the price of the junk food and those who are addictive to junk food any how manage to eat these ill-foods. So awarness is also important along with taxing junk food.
Economics Discussion Topic: Recently there has been discussion in the news about taxing junk food (soft...
Recently there has been discussion in the news about taxing junk food (soft drinks, for example) in an effort to reduce the incidence of obesity in the U.S. Do you think the demand for junk food is elastic or inelastic with respect to price. Based on your knowledge of the price elasticity of demand, do you think the deadweight loss of a soda/junk-food tax would be relatively large or relatively small? Why? Do you think taxing junk food would be...
'an inside look' article page 118-119 chapter 4, essentials of economics 4th edition, Thinking critically question 1.The article implies that the demand for alcopops is price elastic due to the availability of substitutes, such as alcoholic cider. Can we infer that the demand for all alcoholic drinks is also price elastic? Explain. 2.Given your response to question 1, do you think that taxing the sales of alcoholic drinks is an effective policy to reduce alcohol abuse? Explain why or why...
For most products and services, managers know that raising prices will reduce demand, while lowering prices will increase demand. What managers don’t always know is how much demand will change in response to a change in price. In economics, the sensitivity of demand to changing prices is called the price elasticity of demand (PED). It is computed by dividing the percentage change in demand by the percentage change in price. Although PED will be negative in most cases, indicating an...
For most products and services, managers know that raising prices will reduce demand, while lowering prices will increase demand. What managers don’t always know is how much demand will change in response to a change in price. In economics, the sensitivity of demand to changing prices is called the price elasticity of demand (PED). It is computed by dividing the percentage change in demand by the percentage change in price. Although PED will be negative in most cases, indicating an...
Sangria Topochico - The Capital Budgeting Decision In December 2012, María Guadalupe, the owner of Sidral Mundet Sol, had just finished reading a report done by his general manager, Francisco Javier, about the possible investment in a new product line, Sangria Topochico. The idea of Sangria Topochico came about three months earlier when María attended a seminar on youth obesity organized by a local high school that his two children attended. Even though he had often heard of the rising...
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