Cause And Effect On Retailing Essay

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This article tells us about the riot that took place in Singapore and now the government of Singapore plans to restrict public consumption of alcohol and also reduce hours for its retail sales from next year. Alcohol is a demerit good; a demerit good is a good or service whose consumption is considered unhealthy, it has negative effects on the consumers themselves. Restricting the retail hours would help decrease the consumption to a very small extent because the people who want to drink alcohol would go and bulk buy at the time when shops are open. Bulk buying is when people buy large quantities of goods and often negotiate for discounts. High consumption of alcohol shows that there is an existence of market failure. Market failure occurs when social costs and benefits are not reflected in the market price, and the market mechanism does not cover these cost and benefits. There are four types of market failure; lack of public goods (street lights), under- supply of merit goods (education), over supply of demerit goods (cigarettes and alcohol) and existence of externalities. Merit good is a commodity such as education and healthcare provided free for the benefit of the entire society by the government because they would be under-provided if left to the…show more content…
Ban is making the consumption and selling of alcohol illegal. But banning alcohol would have a large effect on the alcohol industry in terms of shareholders and employment. If alcohol is banned the company would start taking out people as they will not make enough revenue (price times quantity) to pay the workers and this would create high levels of unemployment and also the tax revenue for the government would decrease and the alcohol industry is one of the most profitable industry and pays the most tax. Banning a product needs votes and as most of the population of Singapore drinks they are unlikely to vote against the consumption of

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