Leslie’s first act as a city councilwoman is to implement a soda tax because she believes that it will make Pawnee healthier. The new larger sodas are causing obesity in town and Leslie aims to regulate the market through taxes. Depending on the size of the local elasticity, there may not be much of a change in consumption, but it could mean additional revenue for the city.
See more: elasticity, externalities, government regulation, government revenue, health economics, negative externalities, preferences, regulation, taxes
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