Soda Taxes in Mexico

Document Type:Coursework

Subject Area:Economics

Document 1

In the taxation scenario, huge taxes would significantly influence supply and demand through changes in the styles and preference of consumption (Herriges 3). With huge taxes, prices of commodities are bound to rise, which opens room for consumers to purchase alternative products, especially for the low-income populations with households that cannot afford to pay extra for the particular commodities like sugary drinks and beverages. Moreover, while Mexican government might be viewing the imposition of taxes on soda as a mechanism to control the prevalence of various infection like diabetes, consumers usually care about the extra cash they are going to pay. The low-income population is again the one that is most affected by such increased expenses. Companies would need to adjust their quality as well as allow consumers sufficient time to adjust to the high prices of their most preferred drinks, though such process might be slow in some cases.

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