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In: Economics

Explain why levying a tax on sugary products could correct the market fail.

Explain why levying a tax on sugary products could correct the market fail.

Solutions

Expert Solution

Levying the tax in sugary product will increase the price of the product in the market and that will take into account the negative extrnality that excess sugary product in the market will cause. As most of the sugary products are used by the Childrens and the demand for these goods are elastic, so, putting a tax in the market will reduce the demand more.

Rahul Sunny answered 2 years ago
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