Question

this Question: 1 pt 38 of 79 (34 complete) Following below are four graphs and four market scenarios, each of which would cause either a movement along the supply curve for premium bottled water or a shift of the supply curve Match each scenario with the appropriate diagram a. A decrease in the supply of sports drinks 2 b. A drop in the average household income in the United States from $56,000 to 552.000 3 c. An Improvement in the bottling technology for premium bottled water d. An increase in the prices of electrolytes used in premium bottled water 4

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Answer 1

1. A decrease in the supply of sports drinks. This means the supply curve shifts inwards. Therefore, 1.

2 .A drop in teh average household income in the US from $56000 to $52000. This means the purchasing power of people fall implying an inward shift of the demand curve. Therefore, 3.

3. An improvement in the bottling technology for premium bottled water. This means the cost of production falls implying an increase in supply. Therefore, 2.

4. An increase in the price for electrolytes used in premium bottled water .This will increase the price of the bottles. Hence upward movement along the supply curve. Therefore, 4.