Answer to Question #116774 in Economics for baljeet

Question #116774

1. John was discussing the market for cocoa beans with his friend Kim. John said, "Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years, the price of cocoa beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping." Is John right? Briefly explain why or why not.

Expert's answer

John is not right, because there was an increase in demand due the change in expectations, but not the move along the demand curve.