Tax revenue funds education to change behavior

Steps:

• Sugar tax raises prices of high-sugar soft drinks, generating government revenue.
• Revenue is allocated to public education campaigns on health risks of sugary drinks.
• Education increases consumer awareness of weight gain dangers.
• Informed consumers reduce soft drink purchases, lowering sugar intake and overweight rates.

Why D is correct:

• Education leverages behavioral economics by shifting demand curves leftward through awareness, directly reducing consumption without relying on price alone.

Why the others are wrong:

• A: Cheaper high-sugar brands maintain sugar intake, failing to cut calories.
• B: High-sugar substitutes like alcohol or sweets preserve overall sugar consumption.
• C: Inelastic demand means price hikes cause minimal quantity drop, limiting consumption reduction.

Final answer: D