Question

Handwrite in text plz not in pic since its hard to read from and plz dont copy answers that were answered before.  least 3-4 paragraphs

Only one thing can cause movement along a product’s demand curve --- that is, cause a change in quantity demanded for that product --- and that’s a change in that product’s price. On the other hand, there are five key variables that can cause a product’s demand curve to shift to the left or right --- that is, lead to a change in demand. Coca-Cola is experiencing shifts in the U.S. demand curve for its famous cola soft drink, as the huge post-World War II “Baby Boom” generation has aged beyond their prime soft drink consumption years, and as the smaller generations behind the Baby Boomers have been buying relatively more energy drinks, water, juice, and tea, and relatively less soda than previous generations. What two key variables are affecting demand for Coca-Cola in the U.S., and in which direction are these variables shifting the demand curve for Coke?

Answer 1

Coca-cola is experiencing shifts in the US demand curve because people are buying relatively less soda than previous generations. A shift in Coca-cola's demand curve is referring either an increase (rightward movement) or decrease (leftward movement) in the quantity demanded and this shifts are influenced by non-price determinants.

In this context as the current generations are buying relatively more energy drinks, water, juice, and tea, and relatively less soda, so this depicts that the demand for Coca-cola has decreased and hence this decrease in demand has shifted the demand curve leftward.

A decrease in demand is resulting either from decrease is the price of substitute (energy drinks, water, juice, and tea), or decrease in income of individuals, or a change in taste & preferences of consumers, or the composition of the population. Hence the two key variables which are affecting the demand for Coca-Cola in the U.S. to shift the demand curve leftward are:

1. Taste & preferences - A willingness to purchase more of energy drinks, water, juice, and tea than soda.

2. Decrease in price of substitute - Substitute goods like energy drinks, water, juice, and tea competes with coca-cola soda for consumer purchases.