16. Say that the price of cocoa rises sharply at the same time that a greater qu

Question

16. Say that the price of cocoa rises sharply at the same time that a greater quantity is consumed. What shift in demand or supply is most likely to have caused this pattern: a. a rise in demand; b. a fall in demand; c. a rise in supply; d. a fall in supply? Explain your reasoning. 16. Say that the price of cocoa rises sharply at the same time that a greater quantity is consumed. What shift in demand or supply is most likely to have caused this pattern: a. a rise in demand; b. a fall in demand; c. a rise in supply; d. a fall in supply? Explain your reasoning. 16. Say that the price of cocoa rises sharply at the same time that a greater quantity is consumed. What shift in demand or supply is most likely to have caused this pattern: a. a rise in demand; b. a fall in demand; c. a rise in supply; d. a fall in supply? Explain your reasoning.

Explanation / Answer

Option A. A rise in demand

Explanation: When there is a rise in demand, the demand curve shifts towards the right. However, the supply curve remains constant. As a result, the demand curve intersects the supply curve towards the right and at a higher point. As a result, the quantity demanded and the equilibrium price both goes up as compared to earlier.

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