Assume that the Mexican Government wants to collect as much revenue as possible and only has the resources to tax either soda or high-calorie snack foods. Which one will the Mexican Government choose to tax? Why?
After implementing small scale experiments with both taxes they estimate that price elasticity of demand for soda is 1.4 and 0.4 for high-calorie snack foods. Assume that the Mexican Government wants to collect as much revenue as possible and only has the resources to tax either soda or high-calorie snack foods. Which one will the Mexican Government choose to tax? Why?
Assume that the Mexican Government wants to collect as much revenue as possible and only has the resources to tax either soda or high-calorie snack foods. Which one will the Mexican Government choose to tax? Why?