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It is discovered that the consumption of white rice is linked to many cases of diabetes. To discourage the consumption of white rice, the government
It is discovered that the consumption of white rice is linked to many cases of diabetes. To discourage the consumption of white rice, the government is contemplating two (2) policies, an effective price floor on white rice and a tax imposed on the producers of white rice. Appraise the efficiency of the two (2) policies and compare and contrast their welfare effects, assuming that both policies resulted in the same price and quantity of white rice in the market. Support your answer with a suitable white rice market diagram.
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