Occurrences affect the equilibrium price and quantity

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A key ingredient of Nutella (a type of nut butter) is hazelnuts which are grown in many regions around the world. Nutella 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 Nutella has improved significantly during this period.

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

Reference no: EM132407237

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