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    Question

    In the question given below a paragraph is provided

    followed by three statements that may or may not provide correct possible reason(s) for the situation described in the passage. From the options choose the option that provides the correct combination of possible reason(s) that follow. In the last two years, the sales of traditional carbonated soft drinks in Region X have declined by 25%. However, the beverage market overall has not shrunk; instead, sales of bottled water, fruit juices, and sugar-free iced teas have seen a sharp increase of 40% during the same period. Major soda manufacturers are now hurriedly diversifying their product portfolios to include non-carbonated options. What could be the possible reason behind the fall in the sales of traditional carbonated soft drinks? 1. There is a growing health consciousness among consumers in Region X, leading them to avoid beverages with high sugar content and artificial ingredients. 2. The disposable income of the population in Region X has decreased drastically, causing people to stop spending money on any kind of packaged beverages. 3. The government of Region X recently implemented a "sugar tax" on carbonated drinks, making them significantly more expensive than water or fruit juices.
    A Only 1 Correct Answer Incorrect Answer
    B Only 2 Correct Answer Incorrect Answer
    C Only 1 and 3 Correct Answer Incorrect Answer
    D Only 2 and 3 Correct Answer Incorrect Answer
    E All 1, 2 and 3 Correct Answer Incorrect Answer

    Solution

    1 is correct as a shift in consumer preference toward healthier options explains why sugary carbonated drinks dropped while healthier alternatives (water, juice) rose. 3 is correct as a specific tax on carbonated drinks would increase their price relative to the alternatives, acting as a financial disincentive for consumers to buy them.   2 is incorrect as the passage states that the beverage market overall has not shrunk and that other categories (juices, teas) saw a sharp increase. If disposable income had crashed preventing any spending, sales for all packaged beverages would have dropped, not just sodas. Thus, (c) is the right answer.

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