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Question: If a business drops its price will it always increase demand - and will it make more profit? Answer: Assessing the potential effectiveness of food and beverage taxes and subsidies for improving public health: a systematic review of prices, demand and body weight outcomes The taxes and subsidiaries have been increasing on the food and beverage product due to the changing policies and rules of the country. Food and beverage industry is highly demandable compared to the other sectors. Due to increased taxes and subsidiaries imposed on food and beverages, the retailers are thereby, increasing the market price of the products. Such a strategy is undertaken by the food and beverage industries to cope up the hike in the prices. In this way, the business will be able to manage their profit. As a result, the food and beverage industry is hardly affected by the increase or decrease of the products. Therefore, the statement that dropping of price for a business increases its demand is negative for the food and beverage industry (Powell et al. 2012). The Impact of Bio fuels on Commodity Food Prices According to the article, the price of the bio fuel is has affected the commodity food prices. This is because of the transportation pries incurred by the organisation while transporting the food commodities. The business organizations have certain expenditure in terms of transporting the food commodities from the wholesale to the retailers. The transportation cost that needed to transfer the raw materials for the production of food within the industries has to be finally borne by the customers by paying a higher price. The prices of bio fuels are comparatively less than the normal petrol and diesels. As the companies are expending less on transportation cost, there has been subsequent drop in the price of the food commodities of such retailers. Therefore, the statement that dropping in price increases the demand of the business is correct to a certain extent (Zilberman et al. 2012) House Prices, Collateral and Self-Employment According to this article, stronger growth has been noticed in small areas with higher increase in the price of the houses in comparison to stronger growth in the employment. Real estate and housing industry requires small capital in order to start a business. It can be seen that the increase in the price of houses affects the real-estate business. This is because higher price restricts the customers to invest in this business. Therefore, increase in the price does affect the demand of the real-estate business to a certain extent. On the contrary, some people doubt the quality of the product if the price is too less. As a result, the business sector needs to drop their in a way that it does not allow the customers to think about the quality of the product before investing or buying it. Therefore, dropping the price of the products always is not beneficial for the business (Adelino 2013). UK rental property demand falls to two-year low This newspaper article highlights that post Brexit, the price of the houses and rentals has decreased extensively. As the entire economy of the UK has fallen, the price of the rented flats and houses has also fallen. Such lowest price for the rentals and houses in the UK has not been noticed in the past two years. The price of the housing properties has declined since Brexit. However, people favour investing in real-estate business, as they consider it the safest way of increasing the value of their money. Therefore, drop in the price of the real-estate business has created an urge for the people to invest in this business. People currently investing in the real-estate business are foreseeing and predicting a hike in the price of the real-estate business. Though the demand of investing in the business has increased to a certain extent, there are people who are avoiding investing in the business due to the current situation. Therefore, fall in the price has definitely increased the de mand of the real-estate business (Collinson, 2017). Retailers warn on weak pound and blows to consumer confidence According to the newspaper article, the retailers have warned about the challenging times due to increment in the import costs due to Brexit. However, hike of price in the food industry has hardly affected the demand of food among the population. This is because food is the staple thing that nobody can go without it. As a result, increment or decrement of food prices is hardly going to affect the demand of the business among the customers. However, people might reconsider visiting hotels and restaurants for food but business in terms of basic groceries and food will remain unaffected. Food industry is such an industry that is hardly affected by Brexit, as food is a necessity of life. Therefore, though the price of the food imports are reflected in the retail price, the demand of the business is hardly affected (Allen, 2017) References Adelino, M., 2013. House Prices, Collateral and Self-Employment. https://pdfs.semanticscholar.org/7e34/6458e637934f261f33319773888e3059be64.pdf Allen, K. (2017). Retailers warn on weak pound and blows to consumer confidence. [online] the Guardian. Available at: https://www.theguardian.com/business/2016/oct/11/retailers-warn-weak-pound-blows-consumer-confidence-british-retail-consortium [Accessed 13 Aug. 2017]. Collinson, P. (2017). UK rental property demand falls to two-year low. [online] the Guardian. Available at: https://www.theguardian.com/money/2017/jan/27/uk-rental-property-demand-falls-to-two-year-low [Accessed 13 Aug. 2017]. Powell, L.M., Chriqui, J.F., Khan, T., Wada, R. and Chaloupka, F.J., 2012. Assessing the potential effectiveness of food and beverage taxes and subsidies for improving public health: a systematic review of prices, demand and body weight outcomes. https://legislature.vt.gov/assets/Documents/2016/WorkGroups/House%20Ways%20and%20Means/Sugar%20Sweetened%20Beverage%20Tax/W~Frank%20Chaloupka~Study%20-%20Potential%20Effectiveness%20of%20Food%20and%20Beverage%20Taxes%20on%20Public%20Health~3-11-2015.pdf Zilberman, D., Hochman, G., Rajagopal, D., Sexton, S. and Timilsina, G., 2012. The impact of biofuels on commodity food prices: Assessment of findings.American Journal of Agricultural Economics,95(2), pp.275-281. https://www.researchgate.net/profile/Gal_Hochman/publication/236897661_The_Impact_of_Biofuels_on_Commodity_Food_Prices_Assessment_of_Findings/links/0c96053697b4d64e6e000000.pdf