CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Question

Quizplus · Accepted Answer

The decrease in the supply of cocoa beans will lead to an increase in the costs of production for chocolate manufacturers. This increase in production costs will result in higher prices for chocolate, which will lead to a decrease in the quantity demanded. However, since chocolate is a relatively inelastic product, this decrease in quantity demanded will not be enough to offset the increase in price. As a result, the current market demand for chocolate will increase.

CNN Announces That Bad Weather in Central America Has Greatly