ssume that the cost of aluminum used by soft-drink companies increases. Indicate which of the following statements describing the resulting effects in the market for soft drinks distributed in aluminum cans are true (T) or false (F).
Part 2
a. The demand for soft drinks decreases---
False (F)
b. The quantity of soft drinks demanded decreases
True (T)
c. The supply of soft drinks decreases.
False (F)
Wrong.
Factors other than the price of the good that affect the amount supplied are (1) input prices, (2) technology and productivity, (3) taxes and subsidies, (4) price expectations, and (5) the number of sellers. Whenever any of these ceteris paribus conditions changes, there is a change in the supply of the good, and the supply curve shifts to a new position.