Markedly applying a tax on the soda pop will create a

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increased prices of the product. Markedly, applying a tax on the soda pop will create a permanent reduction in the producer and consumer surplus, which is referred to as the deadweight loss. Prominently, this loss occurs because of reduced consumption by the consumers and due to loss of company profits because of fewer sales. Conversely, the burden and incidence of the tax will fall on both the producers and consumers of the soda pop. However, since the consumers are very responsive to the changes in prices due to the levy, the quantity of the product demanded is likely to fall; thus, the producers will bear more of the tax burden. Moreover, due to the elasticity in demand for soda, there is reduced consumption by the consumers since they are not willing to pay for the higher prices. In this scenario, the vital nonmarket issues include the well-being and health of the consumers of the sugary drinks as well as the implementation of the tax on soda pop. The interests comprise of the parties who have a preference in the issues regarding the tariff imposition. For instance, companies such as Pepsi and Coca-Cola, which manufacture the soft drinks, have various interests that are affected by the issue. Additionally, consumers and
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