The effect on the equilibrium price and equilibrium quantity of chocolate will depend on the magnitude of the shortfall in cacao beans and the elasticity of demand for chocolate.
If the shortfall in cacao beans is significant and there is inelastic demand for chocolate (meaning that consumers are not highly responsive to changes in price), then we can expect an increase in the equilibrium price of chocolate and a decrease in the equilibrium quantity.
On the other hand, if the shortfall in cacao beans is relatively small and there is elastic demand for chocolate (meaning that consumers are highly responsive to changes in price), then we may see a smaller increase in the equilibrium price of chocolate and a more moderate decrease in the equilibrium quantity.
Ultimately, the equilibrium price and quantity of chocolate will adjust in response to the imbalance between supply and demand caused by the shortage of cacao beans.
While the world's appetite for chocolate grows more voracious each year, cocoa farms around the globe are failing, under siege from fungal and viral diseases and insects... Researchers predict a shortfall in beans from the cacao tree, the raw material from which chocolate is made, in as little as five to ten years."
Given the information in the news clip, what is the effect on the equilibrium price and equilibrium quantity of chocolate?
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