If guarana (a key ingredient in many energy drinks)becomes less expensive, we would expect
A)the supply curve for energy drinks to shift to the right.
B)the supply curve for energy drinks to shift to the left.
C)the demand curve for energy drinks to shift to the right.
D)the demand curve for energy drinks to shift to the left.

Question

Quizplus · Accepted Answer

A decrease in the cost of producing energy drinks (i.e., a decrease in the cost of guarana) would result in an increase in supply, causing the supply curve to shift to the right. This would mean that producers will be willing and able to produce more energy drinks at any given price level, leading to a lower equilibrium price and higher equilibrium quantity.

If Guarana (A Key Ingredient in Many Energy Drinks)becomes Less