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Answer :
Final answer:
With new regulations increasing production costs and consumers shifting to low-calorie drinks, the bottled water market will likely see a decrease in equilibrium quantity. The increase in costs may lead to higher prices, but the drop in demand contributes to an overall decrease in quantity. Thus, a possible outcome is a decrease in equilibrium quantity of bottled beverages.
Explanation:
Impact of New Regulations and Consumer Shifts
In the context of the bottled drink industry, the introduction of new regulations mandating tamper-resistant packaging coupled with a consumer shift away from soda to low-calorie alternatives will likely lead to significant market changes.
1. Effects of New Regulations
The requirement for tamper-resistant packaging will likely increase the cost of production for bottled water. This could lead to a higher equilibrium price, as producers may pass on these costs to consumers.
2. Consumer Preference Shift
As consumers are switching to low-calorie alternatives, the demand for traditional beverages, including bottled water, may decrease. This decreased demand can lead to a reduction in the equilibrium quantity of bottled drinks available in the market.
Conclusion
Taking into account both the increase in production costs and the decline in demand, it is most likely that there will be a decrease in equilibrium quantity and possibly a variation in price, depending on how much production costs rise compared to the decline in demand.
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