A Severe Drought Has Devastated Cocoa Plants, Causing an Increase

question 396

Multiple Choice

A severe drought has devastated cocoa plants, causing an increase in the price of chocolate. In the market for chocolate chip cookies

• A) a surplus will arise.
• B) supply has decreased and price has increased.
• C) quantity has decreased and price has decreased.
• D) quantity demanded has increased.

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Definitions:

Cost-Volume-Profit

An accounting method used to determine the effects of changes in costs and volume on a company's profits.

Marginal Analysis

An examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.

Price-Setting Process

The method by which a company determines the selling price of its products or services, involving cost analysis, market demand, and competitor pricing strategies.

Aggressive Competition

A market situation characterized by businesses actively seeking to attract customers by using assertive tactics beyond typical marketing and advertising strategies.