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Equilibrium price and quantity of hazelnut butter

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A key ingredient of hazelnut butter (one brand that makes this is Nutella) is hazelnuts which are grown in many regions around the world. Hazelnut butter production uses about a quarter of the world crop. Two things have occurred recently, a frost destroyed a large fraction of total hazelnut crop around the world. At the same time, technology used to produce hazelnut butter has improved significantly during this period.

Q: How do these occurrences affect the equilibrium price and quantity of hazelnut butter? Show your work graphically, and explain.

Please show work and reasoning. (SHOW GRAPHS)

Reference no: EM132498121

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