Homework Answers
a) As the wages have increased then the cost of cocoa production has increased and that will shift the supply curve to the left and the new equilibrium will be at a higher price and higher level of output.
b) This will increase the supply and shift the supply curve to the right, the new equilibrium in the market will be at a higher output and lower level of price.
c) This will reduce the cocoa plantation in the world and that will shift to the supply curve to the left and the new equilibrium will be at a higher price and higher level of output.
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