Tax revenue funds awareness to curb sugar intake

Steps:

• Sugar tax raises soft drink prices, aiming to lower consumption and weight gain.
• Revenue from the tax provides government funds for targeted initiatives.
• Education campaigns inform consumers about health risks of high-sugar drinks.
• Informed consumers reduce soft drink intake, decreasing overweight prevalence.

Why D is correct:

• Tax revenue allocation to education leverages public finance principles, where funds from a sin tax directly address the externality of obesity by changing consumer behavior through awareness.

Why the others are wrong:

• A: Switching to cheaper high-sugar brands maintains consumption levels, not reducing weight.
• B: Substituting other high-sugar goods keeps overall sugar intake high, failing to address obesity.
• C: Inelastic demand means quantity demanded barely changes with price, so tax wouldn't effectively cut consumption.

Final answer: D