Question

What happens to the price and the quantity bought and sold in the cocoa market if countries producing cocoa experience a drought?

Group of answer choices

demand will increase

quantity demanded will increase

supply will decrease

quantity supplied will decrease

Answer 1

Supply will decrease.

Explanation:

Supply will decrease. When the cocoa producing countries experience drought, production of the cocoa will be affected. Cocoa plants will dry and new ones won't survive since there is no enough water. (Oosterhaven, 2019).In the market the amount supplied will decrease since no Cocoa will be transported from the cocoa farms to the market.

Quantity supplied will decrease-Cocoa that had been supplied in the market will be bought by the demanding customers. The amount will reduce since demand may remain constant.

It is because of drought , the quantity that countries may produce are also decrease,as the proper conditions for producing cocoa are also worsens like water , weather and climate conditions etc. hence the supply also decrease and supply curve will shift downwards to the right side a given price