Answer to Question #104685 in Microeconomics for Berenateta

Question

1.Explain the linkage between the cocoa bean and the relevant microeconomic theory. Explain the content of the cocoa bean to show your recognition and understanding of the relevant economic concepts and how it is applied to the real world.
2.with reference to the article, explain the reason for the predicted price of cocoa. Use relevant demand/supply graph to support your answer.
3.if this predicted price of cocoa beans is to be expected, what is likely to be the effect of this on other beverages such as tea and coffee? Use relevant demand/supply graph to support your answer.

Answer 1

1. Cocoa bean market is the microeconomic level, because it is cointed as a market of a particular good.

2. The price of cocoa is determined by the demand and supply for cocoa.

3. As tea and coffee are the substitutes for cocoa, then the increase in price for cocoa will cause the increase in quantity demanded of tea and coffee and vice versa.