Measures to tackle the over-consumption of high-caffeine and high-sugar energy drinks by children and teenagers have been put forward by the Welsh Government. They have proposed a range of measures, including a ban on sales of these drinks to under-16s and restrictions on volume price promotions, such as 'buy-one-get-one-free' deals in supermarkets. Many retail outlets price these drinks very low to attract younger shoppers, who then go on to purchase high-margin snacks. Furthermore, the proposals suggest rules to prevent these drinks from being prioritised at checkouts or end-of-aisle displays.
The Welsh Government also plans to fund a major public health campaign highlighting the cardiovascular and dental risks of high-caffeine energy drinks. Minister for Health and Social Services, Eluned Morgan, commented: "Cheap prices, combined with aggressive marketing targeted directly at young people, have caused a surge in consumption. This is contributing to long-term health issues, including tooth decay, sleep deprivation, cardiovascular strain, and childhood obesity."
‘The Welsh Government also plans to fund a major public health campaign highlighting the cardiovascular and dental risks of high-caffeine energy drinks’ (Extract C, lines 10–12).
With the help of an appropriate diagram, explain why, if left to the market, too many high-sugar, high-caffeine energy drinks 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.