Health Study on Soda
The question
The market for sugary soda is initially in equilibrium. A widely publicized medical study links regular soda consumption to serious health problems, and many consumers change their view of the product. Show the effect of this change on the market for sugary soda, assuming all else is held constant. Show the effect on the Supply and Demand graph.
Drag a curve, or use the arrow buttons. Want the free-play version with every control? Open this graph in the sandbox.
Health Study on Soda: the worked answer
On the Supply and Demand graph, Demand shifts left.
Why Demand shifts left
The study worsens consumer tastes and preferences for soda, which is a determinant of demand. Consumers now buy less soda at every price, so the demand curve shifts to the left. Nothing about the cost or technology of producing soda has changed, so the supply curve stays put.
What happens to the equilibrium
The equilibrium price of soda falls and the equilibrium quantity decreases.
The mistake students make on this one
A common wrong answer shifts supply left too, reasoning that bottlers will produce less soda after the study. They do sell less, but only because the price fell; that is a movement down along an unchanged supply curve, since no input price, tax, or technology changed for producers.
On exam day
Tastes and preferences always land on demand: if the news is about how buyers feel about the product, check that no supply determinant appears anywhere in the stem before you draw.
How this is graded
The checker reads every curve's position before and after your answer. You are marked correct only when Demand shifts left and every other curve on the Supply and Demand graph stays where it started — the same standard an AP reader applies to a drawn graph: the right shift, and nothing extra. There is no AI involved; the rubric is the geometry.
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