Recently there has been discussion in the news about taxing junk food (soft drinks, for example) in an effort to reduce the inci
dence 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 a good idea? Based on your analysis, would it really help reduce the number of obese people in the United States? Explain please give me details.
Throughout the clarification segment elsewhere here, the definition including its concern is mentioned.
Explanation:
Through me, the demand for amounts of unhealthy food seems to be inelastic in terms of costs. I acknowledge that as the cost goes up, consumers will consume less junk food, but perhaps the decrease in the supply is lower than that of the rising rise. It might be because, already though, substitutes for junk foods, particularly across the Us, are challenging to find. Unhealthy food is just the shortest and simplest meal to consume.
The reasoning here seems to be that every customer would have to purchase food even though the price rises by 1%, so consumption will still decrease by somewhere around 1%. So perhaps we can assume that quality does not influence quantities throughout the Junk Food industry.
The reduction of excess baggage would be small since it is inelastic. This symbolizes the corporation's low incompetence and as the cost is changed, the market for quantities is approximately the same, not so much impact.
I thought taxing junk foods, especially to maximize welfare spending, is a smart option. But obesity over here Is not going to help. The incorrect method for combating obesity as well as making our diets balanced is taxes. The irony is that all clients are impacted by taxes regardless of their weight status. The impact of food taxes is unclear and may result in the replacement of items that may comprise of calories that seem to be equivalent or higher.
