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If there was a baby boom of Oompa Loompas ready to work for free, what will...

If there was a baby boom of Oompa Loompas ready to work for free, what will happen to the Willy Wonka chocolate market? A few things to think about:

Has this affected supply or demand of Willy Wonka Chocolate?

What has happened to the price of Willy Wonka chocolate?

Please justify your answer by graphing the change in either supply or demand, as well as the change in price.

Show all work.

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Answer #1

Question: Has this affected supply or demand of Willy Wonka Chocolate?

Answer: Yes due to baby boom of Oompa Loompas ready to work for free, same will increase the supply of labor and eventually will increase supply of chocolate and not demand since free labor will not be able to demand chocolate.

Question: What has happened to the price of Willy Wonka chocolate?

Answer: Prices for Willy Wonka chocolate will get decreased due to cheap/free labor supply and resultantly increase in production and supply of chocolates.

Question: Please justify your answer by graphing the change in either supply or demand, as well as the change in price.

Answer: As explained above supply of chocolates will get increased and its prices will also get decreased in order to sell the chocolates and graph is as under for the same.

en Se auantitAs per above graph it is depicted that due to increase in free labor supply due to baby boom in Oompa Loompas, Production and supply of Willy Wonka chocolate will get increased and this will shift the supply curve S-S to its right and there will be new supply curve created S1-S1 and due to increased supply its prices will get decreased from initial price P to P1 and quantity supplied will also get increased from initial quantity OQ to OQ1.

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