YES! Finally, someone who will go up against me on economics. You better not be just passing through.
Let's get started.
First of all, profit is proportional to production cost, sales and price per unit, it's not just the product of prices and sales. Sales in this case should (naturally) be as high as possible if you want to make profit, this is increased if you're able to offer high quality with reasonable prices, something that you're absolutely forced to in a competitive branch.
You are incorrect. The point of profit maximisation for any business will almost never coincide with the point of sales maximisation. This is because sales maximisation occurs when prices are as low as possible within the constraints of normal profit, and that happens when the average total cost is equal to the average revenue (price). The point of profit maximisation on the other hand occurs where marginal revenue is equal to marginal costs. Since marginal revenue will always be decreasing as output increases (because price has to fall, except in perfect market conditions which these are not) it will always be less than the average revenue and it must therefore (assuming a profit is actually possible in the industry) equal the marginal cost at a lower output (and higher price) than the point of sales maximisation.
To put it simply: firms tend to make more profit when the price is higher than the total unit cost.
Now if the demand of a product is raised at some point in the economy, producers of this product will have to increase quantities, this would fuel a growth in demand backwards, like a chain, to whatever industry is involved with pleasing the needs of the one before (we have a Swedish word for this, but I just can't figure out the english one =/). And so it has a positive effect on not only retail but also everything interlinked with the actual branch.
Now out of that we can also agree on that if we restrain the industry at some point through taxation, this will make it self apparent on a larger scale, both back and forth in the chain, choking demand, and eventually having negative effect on companies, forcing them to downsize. We will just have to ask ourselves if those are losses worth taking in case "somebody actually knows whats best for me".
We need to be more industry specific at this point. The demand for food on the whole is relatively price inelastic, however the demand for any particular foodstuff may be more elastic because of the wide range of available alternatives. When the price of unhealthy food rises, people will not simply stop eating. Instead, they will shift to other foodstuffs for which the demand will increase. This means that the healthy food suppliers will need to supply more - exactly the same ammount more that was lost from the unhealthy industry. In this way, all the labour ejected from the unhealthy food industry can be absorbed by this new demand for healthy food. It's difficult to see how labour like you find in MacDonalds could be an immobile factor of production, and what little capital is lost would have depreciated in a few years anyway so the long term effect is minimal. Much of it may be transferable anyway.
Then there is also the aspect of freedom, which is highly relevent, but I'm sure people like me been yelling it in your face for years so I'll just... go make some more coffee :)
People in general are morons. They are also selfish. There are extra benefits to making sure people can't get their hands what they want all the time. It's like how second hand smoke hurts people.
Anyhow you definately seem to know what you're talking about, I think it's maybe best if I stay out of this one. xD
Don't you dare. I'm enjoying this.