Suppose the Market for "Soda X" Is in Equilibrium

question 30

Multiple Choice

Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?

• A) Price increases and quantity increases
• B) Price decreases and quantity increases.
• C) Price increases and quantity increases.
• D) Price decreases and quantity decreases
• E) No change in price and quantity

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Definitions:

Obsessively Clean

Refers to an extreme focus on cleanliness and orderliness, often beyond what is considered normal or healthy.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, is a manual published by the American Psychiatric Association that provides a standardized language and criteria for the classification of mental disorders.

Cluster System

In psychological testing or data analysis, a cluster system is a method used to group similar objects or individuals based on specific characteristics or qualities.

Paranoia

A mental condition marked by delusions of persecution or grandeur, often without a realistic basis.