Compare and contrast using Pigouvian taxes to address opioids vs. offering access to preventive services for opioids. explain

Answer 1

Both would lower the quantity consumed of opiods, but Pigouvian taxes could be seen as lowering supply or demand for opiods, or driving a wedge between supply and demand. It would lower the price of opiods before taxes but raise it after taxes. It would place a burden on opioid users, with probably most of the burden of the tax falling on opioid buyers because of the highly inelastic demand for opioids, especially from addicts. Preventive services for opiods would lower demand for opiods. The burden of the tax would be spread more widely over all taxpayers, but the burden on any one taxpayer would be smaller.