Answer to Question #166085 in Microeconomics for margaret

Question

In 2018, the UK government will impose a new tax on sugary drinks, aimed at tackling obesity. Behavioural economists believe that taxation alone is unlikely to be very effective in reducing consumption. By 2050, obesity is predicted to affect 60% of adult men, 50% of adult women and 25% of children. IT is associated with a range of health problems including type 2 diabetes, cardiovascular disease and cancer. Explain why, in a free market, sugary drinks may be over consumed.

Answer 1

In a free market such drinks are very popular, its producers spend a lot of money on advertising, they are widely used in fast-food industry, and they cause some kind of addiction, that's why sugary drinks may be over consumed.