Markets generic type of soft drink in a competitive market

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Q. You are the manager of a firm which produces also markets generic type of soft drink in a competitive market. In addition to the large number of generic products in your market, you also compete once modest major brands such as Coca-Cola also Pepsi. Suppose which, due to successful lobby efforts of sugar producers in the United States, Congress is going to levy a $0.50 per pound tariff on all imported raw sugar- the primary input for your product. In addition, Coke also Pepsi plan to launch an aggressive advertising campaign designated to persuade consumers which their branded products are superior to generic soft drinks. Explain how will these events impact the equilibrium price also quantity of generic soft drinks?

Reference no: EM1313543

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