Higher Costs Bite Chocolate Makers
by: Julie Wernau
Jul 12, 2016
Click here to view the full article on WSJ.com
by: Julie Wernau
Jul 12, 2016
Click here to view the full article on WSJ.com
TOPICS: Manufacturing
SUMMARY: The cost of chocolate's two crucial ingredients, cocoa butter and sugar, has risen sharply this year, in an unwelcome development for chocolate makers.
CLASSROOM APPLICATION: Students can evaluate the effect of increases in cocoa butter and sugar prices on the marginal cost of producing chocolate, and they can evaluate the effect of an increase in the marginal cost on the retail price of chocolate.
QUESTIONS:
1. (Introductory) What factor has caused cocoa butter prices to increase?
2. (Advanced) What factor is causing a slowdown in the U.S. and European demand for chocolate?
3. (Advanced) What is the effect of increases in cocoa butter and sugar prices on the marginal cost of producing chocolate? What is the effect of a shift in the marginal cost of producing chocolate on the price of chocolate?
1. (Introductory) What factor has caused cocoa butter prices to increase?
2. (Advanced) What factor is causing a slowdown in the U.S. and European demand for chocolate?
3. (Advanced) What is the effect of increases in cocoa butter and sugar prices on the marginal cost of producing chocolate? What is the effect of a shift in the marginal cost of producing chocolate on the price of chocolate?
Reviewed By: James Dearden, Lehigh University
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