Maryland’s Foam Food Container Ban Takes Effect

     Over the years, many cities and countries alike have taken steps to correct negative environmental impacts like pollution, waste disposal problems, etc. Some of these steps include bans regarding certain goods that contain or are made of materials believed or proven to increase these negative effects on the environment, like plastic bags. In a 2020 U.S. News & World Report article called Maryland Foam Food Container Ban Takes Effect by Elliott Davis, she discusses Maryland’s new ban on the use of foam food containers that was supposed to go into effect on July 1, 2020 but allowed restaurant owners to use any remaining supply of these containers until October, due to the coronavirus pandemic. There is also discussion on the economic impacts of this ban on restaurant owners, especially concerning costs. Overall, the Maryland ban fails to take the law of supply and demand into account despite capturing the price elasticity for food.

    The first failure of the foam food container ban is not taking the law of supply into account. As taught in many microeconomic classes, the law of supply states that sellers will increase the supply of a good if the price of that good goes up, all other factors being equal. Regarding this new ban, many restaurant owners would have to find an alternative to foam food containers, which can increase production costs. Since the idea of making a profit relies on marginal revenue being greater than marginal costs, these same owners would traditionally capture these costs in the pricing of the good, which would include increasing the price of the food they sell. This in turn becomes an evident failure on the part of the Maryland ban for not taking the law of demand into account.

    In addition to not considering the law of supply, the foam food container ban fails to take the law of demand into account. The law of demand refers to the idea that if the price of a good goes up, there will be a lower demand for that good, all other factors being equal. In terms of buying food at restaurants with increasing prices, less and less customers will choose to buy food at these restaurants. They instead may choose substitute goods or alternative means for getting food. For example, some customers may choose to buy food from less-pricey restaurants. As such, this shows how the Maryland ban on foam food containers fails at taking the law of supply into account.

    On the other hand, the Maryland ban does capture the price elasticity of food. In other words, this ban does take into account the fact that food is an inelastic good, meaning that no matter what happens to the price of food, people will still buy it. As such, even if restaurant owners raise the prices of food, customers will still come to purchase their compared to cooking food at home. Therefore, this ban successfully captures the price elasticity of food.

    Altogether, the law of supply and demand are left out of the Maryland ban on foam food containers despite capturing the price elasticity of food. In terms of the law of supply, restaurant owners are left to increase the costs of the food they sell in order to cover the increase in costs for using non-foam containers. In terms of law of demand, people would be less inclined to buy food that is more expensive. Yet due to food being an inelastic good, customers will still come to purchase food from these restaurants regardless of the ban. Thus, if the creators of the bill apply such concepts as the law of supply and demand together with the price elasticity of food, this ban can positively impact economic growth while being a tool to minimize environmental waste.

Source

Davis, Elliott. “Maryland Ban on Foam Food Containers Takes Effect.” U.S. News & World Report, U.S. News & World Report, 1 Oct. 2020, www.usnews.com/news/best-states/articles/2020-10-01/maryland-ban-on-foam-food-containers-takes-effect-squeezing-restaurants.