Question

Simple supply and demand graph
Assume this is the market for smoothies in Valdosta. Which of the following would happen if one of the major smoothie chains went out of business?

(1 point)
Responses

supply of smoothies would shift right
supply of smoothies would shift right

demand for smoothies would decrease
demand for smoothies would decrease

price of smoothies would increase
price of smoothies would increase

all of these would occur

Answer 1

If one of the major smoothie chains went out of business, we would expect that the **supply of smoothies would shift left**. This is because there would be fewer providers in the market resulting in a decreased overall supply of smoothies.

Given the options provided:

1. **Supply of smoothies would shift right** - This is incorrect. The supply would actually shift left (decrease).
2. **Demand for smoothies would decrease** - This is not necessarily true; demand may remain the same or even increase if consumers seek alternatives.
3. **Price of smoothies would increase** - This is likely true; with a decrease in supply and the demand remaining constant, prices would likely rise.

Therefore, the best response to the scenario posed is **the price of smoothies would increase.**

So, none of the options accurately represents all the effects, but the most relevant outcome is that the price of smoothies would likely increase.