Hi there, I'm trying to answer this economics question:  (5) Should governments consider adopting a price floor on sugary drinks, instead of taxes?  Why, or why not?  This is what I have A price floor is the minimum price a good or service can be priced. In the context of reducing the negative externality of sugary drinks, it would only be binding and successful if the price is above the equilibrium quantity of sugary drinks.

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
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Hi there, I'm trying to answer this economics question: 

(5) Should governments consider adopting a price floor on sugary drinks, instead of taxes? 

Why, or why not? 

This is what I have

A price floor is the minimum price a good or service can be priced. In the context of reducing the negative externality of sugary drinks, it would only be binding and successful if the price is above the equilibrium quantity of sugary drinks.  

 

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