Topic > Supply and Demand Relationship - 1393

This is due to the direct relationship between the increase in taxes on alcopops and the increase in prices and the indirect relationship between the increase in taxes on alcopops and the decrease in the supply of alcopop. Taxes are not the price determinants that lead to increase in the cost of production, so supply will decrease. The government increases taxes on alcopops to combat the reduction of binge eating because here the government has the information that alcopops have been very popular among young drinkers and in this the spirit is mixed with soft drinks. And the consequences have been noted as increased violence, unwanted pregnancies, car accidents, and liver and brain dysfunction. Situation 4b Effect on the price and quantity sold of other alcoholic beverages for which taxes remain unchangedGraphExplanationWhile taxes on other alcoholic beverages remain unchanged and the tax on alcopops is high, demand for alcoholic products for which the tax is unchanged will increase and will increase the price for other alcoholic products