The Market for Alcoholic Beverages, Questions and Answers

1166 Words3 Pages
bulb-icon

Recommended: Economic consequences of alcohol prohibition

2 Questions to address: a) What do we know about the demand for alcohol, and how is this relevant to policy makers wishing to curb consumption? b) What can you determine about the supply of alcoholic beverages (in terms of industry structure)? How might individual firms hope to get ahead in this market? c) Explain, using diagrams, how individual producers in this industry might be affected by the price floor implemented in Scotland. What determines the extent to which they are affected? d) Why do you think the policy makers have opted for a price floor over a tax? The Market for Alcoholic Beverages It is stated in The Economist print edition (2013) that according to World Health Organization, “the global consumption of alcohol has been stable since 1990”. However, across the world, small part of population consume a larger amount of alcoholic beverages (Alcohol pricing: We wish 2013). Even though the large-drinkers population is smaller than normal-drinkers or non-drinkers population, they do so in a more harmful and hazardous way (Alcohol pricing: Mulled Whines 2013). Alcohol consumption will not only affects drinkers but it also has social and economics implications. For instance, in many countries, government will cover the medical costs of the people in their country. So as a result, government will need to spend money on drinkers when heavy drinkers harm themselves or other people (World Health Organization 2011). Other than that WHO (2011) also mentioned that there are economic costs related to law enforcement and other costs. Demand of alcohol follow the law of demand, that is “holding everything else constant, when the price of a product falls the quantity demanded of the product will increase, and when the price of a prod... ... middle of paper ... ...e to reduce alcohol consumption. As an article in December 2013 The Economist stated “just as bans on indoor smoking spread rapidly from country to country, the Scottish decision on the price of booze could raise drink prices all over the world. A sobering thought in the festive season”. 7 Reference List Hubbard, G, Garnett, A, Lewis, P & O‟Brien, T 2012, Microeconomics, 2nd edn, Pearson, Sydney The Economist 2013, „Alcohol pricing: Mulled Whines‟, The Economist 21st December. Available from: . The Economist 2013, „Alcohol pricing: We wish you a merry(ish) Christmas‟, The Economist 21st December. Available from: lives-and-money-scotland-right-try-it-we-wish-you>. [8 May 2014]. World Health Organization 2011, Global status report on alcohol and health, WHO, Switzerland.

Show More
Related

  • Compare Winter Dreams And The Great Gatsby

    702 Words  | 2 Pages

    ...vity to rise. Today, the use and abuse of alcohol continues to grow in the United States.

    Read More

  • Underage Drinking: Enforcing The Drinking Age

    1155 Words  | 3 Pages

    For decades, certain people have been contemplating on how to go about the issue of underage drinking; people of the government, parents, and other individuals concerned in global affairs. The problem is, the issue of underage drinking and the nationwide ineffectiveness of the drinking age law of twenty-one isn't debated and discussed as much and as aggressively as it should be. And the main components of discussion ought to be the matter of binge drinking among teenagers and college students, drinking issues and statistics in foreign countries, and finally, possible solutions for this problem. The main point is that the states of our country can only attempt to enforce the law rather than try approaching the problem in any other way. So for that reason, states should be allowed to figure out and experiment on possible ways to solve this matter on their own without government interference.

    Read More

  • The Drinking Age Should Not Be Lowered

    1712 Words  | 4 Pages

    Muhlenfeld, Elisabeth. “Seeking a Drinking Age Debate.” University Business 11.10 (2008): 53-4. Academic Search Premier. Web. 3 Mar. 2010.

    Read More

  • The Problems Associated with Underage Drinking

    1121 Words  | 3 Pages

    U.S. Dept. Of Health and Human Services. Opposing Viewpoints: Alcohol. 3 vols. Detriot: Christine Nasso, 2008.

    Read More

  • The Backlash of Prohibition

    807 Words  | 2 Pages

    Prohibition not only failed in its promise to curb the social problem created by alcohol. It actually promoted s...

    Read More

  • The Drinking Age Limit

    717 Words  | 2 Pages

    In order to get a drink, teenager will carry fake I.D.'s, creating more trouble, or sneak drinks from their parents' liquor cabinet. This kind of devious attitude does not encourage responsible drinking. Furthermore, when the opportunity to drink arises there is a kind of "Let's make up for lost time" attitude. The result is binge drinking. C. Teen drinking has been a long-standing problem in American culture, which the drinking age lows have done very little to stop. The American society does not teach the youth limits or responsibilities. Instead, they seemingly assume that, upon reaching the legal age of twenty-one, those "children" will somehow know their limits and be able to control themselves with alcohol and other such substances. III. A. The drinking age should be lowered to 16. As fare as I know five (six) developed nations in Europe have minimum drinking age of 16 (Austria, Belgium, France, Italy, and Spain- Germany-for beer and wine only).

    Read More

  • Essay On Lowering The Drinking Age

    579 Words  | 2 Pages

    Today alcohol is a part of culture all around the world. Even looking into the past alcohol has been a symbol to most countries. Alcohol has been a symbol for America’s culture since colonial times. Through Prohibition’s huge failure of banning the sale, transportation, and manufacture of alcohol, Americans showed how alcohol was an important to the culture of America. United States has surely been accustomed to controversies relating the consumption of alcohol. The most recent and ongoing controversy is whether the legal drinking age should be lowered from twenty-one to eighteen.

    Read More

  • Should Drugs Be Decriminalized?

    1650 Words  | 4 Pages

    Thies, C. F., & Register, C. (1993). Decriminalization of marijuana and demand for alcohol, marijuana and cocaine. The Social Sciences Journal, 30(4), 385-399.

    Read More

  • Failures of the Drug War

    1023 Words  | 3 Pages

    Thornton, Mark. "Alcohol Prohibition Was a Failure." Policy Analysis. CATO Institute. CATO Institute, 17 July 1991. Web. 21 June 2011. .

    Read More

  • Drinking Age Interview

    732 Words  | 2 Pages

    This paper is based on an interview done with a Baylor student on the topic of the United States drinking age. In 1984, the United States passed the Drinking Age Act which declares that each state must make their drinking age twenty-one if they want to receive State Highway Funds. This is important because of the people under the age of twenty-one who drink. This happens mostly at parties in high school and in college. The interviewee believes that the drinking age should be reduced back to eighteen due to tobacco age limit, enlistment age limit, and less government regulation.

    Read More

  • Economy: The Law of Supply and Demand

    998 Words  | 2 Pages

    A change in quantity supplied is just a movement from one point to another in the supply curve. In opposite, the cause of a change in supply is a change in one the determinants of supply that shifts the curve either to the left or the right. These determinants are the resource prices, technology, taxes and subsidies, producer expectations, and number of sellers. An equilibrium price is required to produce an equilibrium quantity and a price below that amount is referred as quantity supplied of zero no firms that are entering that particular business. If the coefficient of price is greater than zero, as the price of the output goes up, firms wants to produce more of that output. As the price of the output goes up it becomes more appealing for the firms to shift resources into the production of that output. Therefore, the slope of a supply curve is the change in price divided by the change in quantity. The constant in this equation is something less (negative number always) than zero because it requires strictly a positive...

    Read More

  • Equilibrium in the Market

    1200 Words  | 3 Pages

    With supply solely, factors involved with regulation of the supply also control some aspects of demand. Things such as production costs and desired net profit can determine whether a business succeeds or not. Having a balance between quantity and price is the greatest control any business can have. Pricing is obviously one of the most beneficial, or destructive, parts of a business. Pricing is the first and most valuable thing an individual will look at, which will overrule most other judgments based off of quality and detail. Balancing the price, however, helps to create a pristine product, with just the right amount of detail that will fuel the market, while still generating a steady net income.

    Read More

  • The Beer Industry: The Brewing Industry

    832 Words  | 2 Pages

    The Brewing Industry is a global business that produces and sells beer, with more than 133 billion litres of beer sold per year and revenues of $294 billion dollars in 2006. In 2015 there was a 12.8% rise in craft beer sales in the United States, with the craft beer market worth $22.3 billion dollars (The Brewers Association, 2015). The Brewing Industry is made up of numerous multinational companies that annually produce hundreds of millions of beer barrels, and just in the United States sells over $100 billion dollars in beer per year (Beer Institute Annual Report, 2014). In the United States, the individual who is in charge of the production of beer is known as the Brew Master. From 4% to 6% (abv) is the common strength

    Read More

  • The Effects of Piracy on the Music Industry

    1131 Words  | 3 Pages

    ...n the companies will have to decrease the price otherwise the product will not be sold at higher prices and the revenue would not be as large as companies would like to.

    Read More

  • The Effects and Impact of Alcohol Consumption

    1162 Words  | 3 Pages

    Cook, Philip J., and Michael J. Moore. "Health Affairs." The Economics Of Alcohol Abuse And Alcohol-Control Policies. Health Affairs, n.d. Web. 03 Apr. 2014.

    Read More

More about The Market for Alcoholic Beverages, Questions and Answers

Open Document