What is the likely market outcome when there is a decrease in the demand for soft drinks and an increase in supply?

When there is a decrease in demand for a product, such as soft drinks, it typically leads to a downward pressure on the equilibrium price, as consumers are less willing to buy the product at previous prices. Simultaneously, an increase in supply means that producers are willing to sell more of the product at all price levels.

With both of these changes occurring, the equilibrium price will likely decrease because the lower demand shifts the demand curve to the left, and the increased supply shifts the supply curve to the right. This combination results in an excess supply at the original equilibrium price, prompting producers to lower their prices to attract buyers.

The equilibrium quantity, however, may not have a definitive direction—it could either increase or decrease based on the relative magnitudes of the shifts in demand and supply. If the increase in supply is greater than the decrease in demand, the equilibrium quantity will rise; conversely, if the decrease in demand is more substantial than the increase in supply, the equilibrium quantity will fall. Therefore, the outcome captures the broad range of possible effects on equilibrium quantity while consistently indicating that the equilibrium price will decline. Thus, the correct answer accounts for the dynamics introduced by both the decrease in demand and the increase in supply.