The government is facing growing pressure to intervene in the rapidly expanding market for single-use disposable vapes. Originally marketed as an aid for adult smoking cessation, these brightly coloured, fruit-flavoured devices have seen a massive surge in popularity among school-aged children. Health authorities have warned that young consumers are often completely unaware of the high nicotine concentration in these devices, leading to rapid dependency and long-term respiratory risks. Furthermore, local councils have highlighted the significant external costs associated with litter and the hazardous disposal of lithium-ion batteries.
In response, the Department of Health is considering a ban on sweet-flavoured vapes, alongside a targeted public health campaign to educate teenagers on the respiratory and addictive hazards of vaping. A spokesperson noted: "Low retail prices and appealing packaging mean the market is failing to account for both the long-term healthcare burden on the NHS and the mounting environmental clean-up costs."
‘...the Department of Health is considering a ban on sweet-flavoured vapes, alongside a targeted public health campaign to educate teenagers on the respiratory and addictive hazards of vaping’ (Extract C, lines 8–10).
With the help of an appropriate diagram, explain why, if left to the market, too many disposable vapes are consumed.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.