Determine what is the equilibrium price and quantity

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Reference no: EM13234447

Research suggests that taxing pizza and soda would reduce the incidence of obesity in the U.S.A. Suppose you were required to choose between a price ceiling and a floor price to achieve the same result. which would you choose, and would you set it above or below the equilibrium price? Given your choice of policy, would you expect a shortage or surplus in the market for pizza? Illustrate on a single graph the effects of your chosen policy. Ensure that you clearly lable the following points:

a) actual price and quantity given your chosen policy (Pa,Qa).

b) Equilibrium price and quantity in the absence of your chosen policy (P*,Q*)

Reference no: EM13234447

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