Suppose we are analyzing the market for hot chocolate and at equilibrium. For each, identify the determinant of supply or demand that is involved, and also state whether there will be an increase or decrease in supply or demand. Finally, how would equilibrium price and quantity change with the shift in the supply or demand curve?
a. Winter starts and the weather turns sharply colder.
b. The price of tea, a substitute for hot chocolate, falls.
c. The price of cocoa beans decreases.
d. The price of whipped cream falls.
e. A better method of harvesting cocoa beans is introduced.
f. The Surgeon General of the U.S. announces that hot chocolate cures acne.
g. Protesting farmers dump millions of gallons of milk, causing the price of milk to rise.
h. Consumer income falls because of a recession and hot chocolate is considered a normal good.