evaluate the view that imposing tax is the most effective government policy for reducing the market failures arising from the over consumption of unhealthy food and drink. (25 marks)
You could argue that if demand keeps increasing, the price of sugary drinks will also increase and this may in turn start rationing those who cannot afford the higher prices so in the long run it may reduce the quantity of people consuming sugary drinks~ rationing function of the price mechanism (evaluative point)
Or you could talk about the PED of sugary drinks and how they are likely to be price inelastic and so the burden of tax will fall on the consumer more than the producer. So it will significantly limit the consumption of unhealthy drinks/food etc.
Perhaps as another point you could offer an alternative like a minimum price scheme and how that limits the quantity produced however you could evaluate by saying it causes excess supply which the government may have to buy up and dispose of thus incurring an opportunity cost