There has been an annoying increasing pattern of obesity-related disease in China over the last three decades. As widely acknowledged, one of the key causes of such pattern is the rapid growth of fast-food industry (e.g KFC, Pizza Hut, Wallace, etc). Which of the following policy solutions you wouldn’t suggest to Chinese government to reduce the national demand on fast-food products?

Question

BlackTom AI · Accepted Answer

Limiting the number of fast-food restaurants is a supply restriction, not a demand-reduction measure; it changes market supply and access rather than addressing consumer preferences or information.

1. Relevant knowledge points and concepts
- Demand vs. supply: demand policies shift consumers’ willingness/ability to buy (demand curve), while supply restrictions reduce the number of sellers or quantity supplied (supply curve).
- Information and advertising: education, labeling, and ad bans affect tastes, information, and exposure, which directly reduce demand.
- Unintended consequences of supply controls: black markets, higher prices, inequitable access, and regulatory/competition issues.

2. Step-by-step reasoning
- Option (a) caps the number of restaurants per city. That is a regulatory limit on supply. It may reduce quantity available locally, but it does not change consumers’ underlying preferences or knowledge. People who still want fast food will pay higher prices, travel farther, or use delivery/unregulated vendors.
- Options (b), (c), (d) all target demand drivers: education changes preferences long-term; calorie labeling gives consumers information to choose less; advertising bans reduce exposure and the persuasive influence that creates demand (especially among children).

3. Calculations / intermediate steps
- No numeric calculation is required. Conceptual “steps”: policy → target (supply or demand) → expected effect on quantity demanded. For (a): policy → supply cap → lower supply & higher price, ambiguous long-run demand change. For (b–d): policy → lower willingness to buy → leftward shift in demand curve → lower equilibrium quantity and potentially lower prices.

4. Why the correct answer is correct
- The question asks which you would not suggest to reduce national demand. Since (a) does not directly reduce demand (it controls supply) and has many side effects, it is the least appropriate to recommend for reducing national demand on fast food.

5. Why other options are appropriate (brief)
- (b) Education changes tastes/knowledge, reducing demand over time.
- (c) Calorie labeling improves information, often leading to lower-calorie choices.
- (d) Banning TV ads reduces exposure that creates and sustains demand, particularly in children.

6. Conclusion
- Therefore the policy you would not suggest to reduce national demand is (a) Limitation on the number of fast-food restaurants — this matches the provided answer.

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