https://file.aiquickdraw.com/mathbot/file/172705792975392paxueq.jpg

The graph in the image represents the **soft drinks market**, with the standard supply and demand curves. The scenario described suggests that:

1. One of the industry's major suppliers of soft drinks has decided to exit the market to focus on its snack foods.
2. The average price of soft drinks has increased.
3. The total amount of soft drink sales has increased.

### Analysis:
- **Supply Side**: If a major supplier exits the market, the overall supply of soft drinks will decrease. This is shown as a **leftward shift of the supply curve**, meaning the quantity supplied decreases at every price level, leading to higher prices.
  
- **Demand Side**: An increase in the average price suggests a change in market conditions, possibly due to a shift in the demand curve. If sales are increasing, it means that **demand has increased**, shifting the demand curve **rightward**.

### Expected Graph Adjustments:
1. **Supply Curve Shift**: Shift the **supply curve left** because one supplier has exited.
2. **Demand Curve Shift**: Shift the **demand curve right** to represent increased sales, which means more quantity is demanded at a higher price.

This combination of supply reduction and demand increase will lead to a new market equilibrium where both **price** and **quantity** are higher.

Would you like more detailed steps on graph manipulation or further clarification?

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Here are five related questions to further explore the topic:
1. How do changes in supply and demand typically affect market equilibrium?
2. What factors might cause a supplier to exit the market besides focusing on other products?
3. How can increased demand result in higher prices in a competitive market?
4. What are other examples of markets where both demand and prices increase simultaneously?
5. How do external factors like advertising or trends influence demand in the short term?

**Tip**: Remember that a rightward shift in the demand curve always leads to an increase in equilibrium price and quantity if supply stays constant.

The graph represents the market for soft drinks. Suppose that one of the industry's major suppliers of soft drinks has decided to exit the market to focus on its snack foods. At the same time, the average price of soft drinks has increased and the total amount of soft drink sales has increased. Manipulate the graph to demonstrate these changes in the market for soft drinks.

Analyze the soft drinks market scenario where a major supplier exits, causing a leftward supply curve shift, while increased demand drives the demand curve rightward. Explore how these shifts impact price and quantity equilibrium in this economics problem.

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