Which of the following would cause a shift in the supply curve for soda? a

Economics Dec 12, 2020

Which of the following would cause a shift in the supply curve for soda?

a. A price increase for bottled water.

b. A decline in consumer income.

c. A celebrity endorsement of soda.

d. An increase in soda-production technology.

Expert Solution

d. An increase in soda-production technology.

Improvement in soda-production technology will cause the production of soda to increase. On the graph below, the expansion in the generation of soda is shown by the by the rightward shift in the supply curve from S0 to S1. This change culminates in a decline in the equilibrium price from P2 to P1 and an increase in the equilibrium quantity from Q1 to Q2.

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