Chocolate+supply+threatened+by+cocoa+crisis-Lauren

Source-http://news.discovery.com/earth/chocolate-supply-threatened-by-cocoa-crisis.html

Date- Nov 11, 2010

Summary- The price of cocoa, the raw ingredient for chocolate, has been quickly increasing in international markets. Demand for chocolate, especially for dark chocolate (because it uses more cocoa) has helped fuel price increases. Also unfair trade and environmental problems have resulted in the decrease in supply. West Africa leads the world in cocoa production. But the profits don't come back to many of the farmers there, and that is one of the main causes of the shortage.In the Ivory Coast, cocoa farmers often earn less than $1 a day, and in many cases the land they farm has lost its fertility, said Tony Lass (Cocoa Research Association). Because of the decreasing supply of chocolate and the lack of any profit in the chocolate market, Ivory Coast farmers are leaving behind cocoa orchards for the cities.

Definitions- Supply- The amount of a good or service offered for sale. Supply Curve-relates the supply of a good to its price, holding the prices of inputs constant. Demand- The quantity of a good or service that people want to buy. Demand Curve- relates the demand for a good to its own price, holding all other factors constant. Equilibrium price- quantity supplied and quantity demanded are equalfor competitive producers is their marginal cost. Normative Statement- expresses a value judgement about whether a situation is subjectively desirable or undesirable. It isn't set in stone, it is based on opinion. Competition-The situation when anybody who wants to buy or sell has a choice of possible suppliers or customers Profits-the difference between total revenues and the explicit costs and opportunity cost of all factors of production Shortage-a term describing a disparity between the amount demanded for a product or service and the amount supplied in a market. Specifically, a shortage occurs when there is excess demand; therefore, it is the opposite of a surplus. Short term-the time period when at least one factor of production is fixed.

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Evaluation- I think that more money should go into the farmers and not the companies wallets. Also even if they are going into the companies wallets they should invest that money into better resources for the farmers, this includes more cocoa beans for farmers, however this won't help in the short term, firms would have to wait till the plants have grown before getting any chocolate made. Demand for chocolate doesn't seem to decrease due to the shortage. Most people are dependent on chocolate and eat some everyday. The more the supply decreases the more uproar from consumers. The only way to satisfy the chocolate void would be in "mocklate" the fake chocolate, this could be a future market for the farmers and the firms in the chocolate business.