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A recent survey showed the health benefits of cranberry juice for treating heart and other respiratory...

A recent survey showed the health benefits of cranberry juice for treating heart and other respiratory disorders. The exhibit below shows that the initial demand curve for cranberry juice is D1. Which of the following is likely to be a consequence of the publication of the survey?​

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Answer #1

As the report of recent survey highlights the health benefit of the Cranberry juice, it will increase the demand for the juices. This increase in demand will cause the price to rise and shift the demand curve from D1 to D2 as shown in the graph below.

As per the above graph, initially, the market for cranberry was at equilibrium at point "a" the price at this point was P and quantity demanded was Q. After the positive report, the quantity will increase to Q' and the price will rise to P'. Demand curve D1 will shift to D2.

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