Equilibrium price and quantity of generic soft drinks

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1. You are the manager of a firm that produces and markets a generic type of soft drink in a competitive market. In addition to the large number of generic products in your market, you also compete against major brands such as Coca-Cola andPepsi. Suppose that, due to the successful lobbying efforts of sugar producers in the United States, Congress is going to levy a $0.50 per pound tariff on allimported raw sugar-the primary input for your product. In addition, Coke and Pepsi plan to launch an aggressive advertising campaign designed to persuadeconsumers that their branded products are superior to generic soft drinks. How will these events impact the equilibrium price and quantity of generic soft drinks?

Reference no: EM133079088

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