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You are a chocolate lover and you have been asked by your economics teacher to prepare a market analysis of chocolate in the U.S. From data search, you identified the following two relevant news, so you conduct your analysis based on them. News 1 Coronavirus forces chocolate factory to suspend production for first time since World War II. Given the current events with COVID-19, chocolate factories in the U.S. concern for the health and safety of their employees, so they have made the decision to initiate an interruption that most chocolate factories are suspending their production. News 2 NEW DATA: Consumers Find Joy in Chocolate and Candy During COVID-19. People across the U.S. look for ways to add a little bit of joy to what has been a very serious and uncertain time. Consumers appreciate and value chocolate and candy during these uncertain times because of their uncanny ability to boost moods and lighten perspectives, according to new data from NCA. (a) Consider the information of both News 1 and News 2, what are the combined effects on the equilibrium price and equilibrium quantity of chocolate in the U.S.? (b) Your analysis shows that there is an increase in the quantity of chocolate sold in the U.S. market. Illustrate this observation by ONE demand-and-supply diagram. No explanation is needed.

Q&A Education