Answer to Question #85863 in Microeconomics for Simeone Montrond

Question #85863
An article in the Wall Street Journal described the production of cocoa beans used to make chocolate in African countries such as Ghana and Ivory Coast. The article explained that when prices of cocoa beans rise, it can take two to four years for new trees to produce the pods in which the beans are grown. If the demand for chocolate were to increase, all else equal, would you expect the price of chocolate to be greater after one year or after four years? Use a graph to illustrate your answer.
1
Expert's answer
2019-03-07T11:47:01-0500

If the demand for chocolate were to increase, all else equal, we would expect the price of chocolate to be greater after one year, because there will be no change in supply. But in 4 years the supply of chocolate would increase too, so the equilibrium price would decrease.


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS