THE MARKET FOR ALCOHOLIC BEVERAGES. Research Paper (Research Paper Sample)

THE MARKET FOR ALCOHOLIC BEVERAGES
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Part (A)
The consumers of alcohol respond to changes in prices of alcohol just any other commodity, such that an increase in price of alcohol generates a corresponding decrease in quantity demanded for alcohol (Baumol & Blinder, 2012). This is important for the policy makers who wish to curb alcohol consumption because it guides policy direction or effective policy measures to be taken to curb alcohol abuse (excessive consumption). An important aspect of the demand for alcohol to the policy makers is that an increase in alcohol prices leads to a decrease in alcohol-related harms such as chronic health conditions including liver cirrhosis mortality.
Based on this knowledge regarding demand for alcohol, policy makers are then in a better position to choose whether to implement alcohol taxation, a minimum price per unit of alcohol (price floors), ban on sale below cost of alcohol, or even establishing alcohol monopolies.