Answer to Question #158927 in Math for Lo

Question

Use supply and demand curves to illustrate how each of the following events would

affect the price of KitKat chocolate bar and the quantity of Kitkat bought and sold:

a. An increase in the price of Cadbury chocolate bar.                    

b. An increase in the price of Chocolate.                              

c. A decrease in average income levels.                              

    d.   Pandemic has caused cocoa harvest to drop drastically.  

Answer 1

a. An increase in the price of Cadbury chocolate bar will increase the demand for KitKat, as a result both equilibrium price and quantity will increase.

b. An increase in the price of Chocolate will decrease the supply of KitKat, as a result the equilibrium price will increase, and quantity will decrease.

c. A decrease in average income levels will decrease the demand for KitKat, as a result both equilibrium price and quantity will decrease.

d. If pandemic has caused cocoa harvest to drop drastically, then the supply of KitKat will decrease, as a result the equilibrium price will increase, and quantity will decrease.