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Taxes on alcohol is an example of market-based policies. explain

Taxes on alcohol is an example of market-based policies. explain

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Market based policies are examples of policies data in desig to promote the positive externality or to reduce the effect of negative externality on the whole and for this taxes is one of the instrument that can affect the market of the product vastly. In this regard consider alcohol is a product which is not seen as the best product that can lead to superior life according to the interest of the public and the government feels that it would be beneficial if the consumption of alcohol is reduced to a great extent and for this in order to reduce the demand of alcohol in the market more taxes imposed on alcohol with which the prices of alcohol rise to a great extent and the demand of alcohol falls. That is the reason why alcohol can be considered as an example of market based policy.

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