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)
supply of smoothies would shift right
demand for smoothies would decrease
price of smoothies would increase
all of these would occur
It is not possible to determine the exact outcome without more information. However, it is likely that all of the options could potentially occur to some extent if a major smoothie chain went out of business in the market for smoothies in Valdosta.
If a major smoothie chain goes out of business, it would decrease the supply of smoothies in the market in Valdosta. This is because the smoothies provided by the chain are no longer available.
The decrease in supply could also lead to a decrease in the overall demand for smoothies in the market. This is because consumers who were loyal to the chain may no longer have access to their preferred smoothies, leading them to consume fewer smoothies overall.
Additionally, if the demand for smoothies does not decrease significantly, but the supply does, this could lead to an increase in the price of smoothies. This is because the decrease in supply relative to demand creates a scarcity which could drive up prices.
It is important to note that the extent to which each of these outcomes would occur would depend on various factors, such as the size of the chain, the availability of alternative smoothie options, and the preferences of consumers in Valdosta.