Question

The Coca-Cola Company is an American multinational corporation, and manufacturer, retailer, and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Atlanta, Georgia. In Ghana, the company was formed from a divestiture of Bottling Division of G.N.T.C in March 1995 and started operations on March 7, 1995 at the GNTC plant at Adjabeng. The new premises sited off the Spintex Road, was commissioned in 1996. Since the divestiture, the Company has invested over US$90 million in vehicles, glass bottles, plastic bottles, plastic crates, production and marketing equipment. In 2019, the company contracted an economist who estimated the demand function for the company’s product (Coca-Cola) using data from 28 supermarket as follows:

?= +0.5?−24=0

where P is the price per bottle and ?= is the quantity demanded. In addition, the economist also

estimated the supply function for product as follows.

4?> − 3? + 4 = 0

where P is the price per bottle and ?> is the quantity supplied. As the consultant of this

company, you are to use this information to:

(i) Determine the equilibrium level of price and quantity 1 marks (ii) Represent your answer graphically by sketching the demand and supply curves.

2 marks (iii) Determine the welfare of economic agents using integration 3 marks (iv) Supposethegovernmentimposesataxof¢4oneverybottlesold,determinethenew

equilibrium price and quantity 3 marks (v) Howwilltheconsumersandproducerssharethetaxperunit? 1mark

Answer 1

PLEASE LIKE MY ANSWER AND SUPPORT ME. THANK YOU