Week 1 – Discussion – EC0 550
“Supply and Demand” Please respond to the following:
Consider the Week 1 scenario for Katrina’s Candies:
1. What are the key factors that affect the demand for Katrina’s Candies?
2. What are the key factors that affect the supply of Katrina’s Candies?
The graph below represents two (2) demand curves for Katrina’s Candies.
3. Does the movement from point A to point B represent a “change in demand” or a “change in the quantity demanded”? What could have brought about this change?
4. Does the movement from point A to point C represent a “change in demand” or a “change in the quantity demanded”? What could have brought about this change?
5. Why is it important to be able to distinction a “change in demand” from a “change in the quantity demanded”?
Click on this link above to view the graph:
**Supplemental Resources: Provided by Professor (See below)
Our featured firm in the weekly scenarios is Katrina’s Candies – a producer of unique chocolate candies. The chart below provides relevant information about current trends in the price of cocoa beans, a major ingredient in the production of Katrina’s candies. It appears cocoa bean prices have been declining since their peak price in February of 2016. These lower prices may be good news for consumers of chocolate – but bad news for farmers of cocoa beans. What economic and/or environmental factors could change the declining trajectory of cocoa bean prices?
For chart details, click on this link http://www.indexmundi.com/commodities/?commodity=cocoa-beans
The Youtube video below, aptly titled the Futures Cocoa War highlights the complexities of trading future contracts in the cocoa market.
How to Calculate Equilibrium Price and Quantitiy (Demand and Supply)
Demand Elasticities: Price Elasticity, Cross- Price Elasticity, and Income Elasticity
Demand and Supply and Market Equilibrium
Alegebraic Treatment of Market Equilibrium by Anne Alexander (Website)