A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast. Suppose that the marginal cost of producing cocoa beans is constant at GHC1000 per bag and the demand for cocoa beans is described by the following schedule. Price (GHC) Quantity (bags) 8000 5000 7000 6000 6000 5000 4000 3000 2000 1000 7000 8000 9000 10000 11000 12000 a) If there were many suppliers of cocoa beans, what would be the price and quantity? b) If there were only one supplier of cocoa, what would be the price and quantity? c) At a meeting in October 2017 in Accra, the leaders of the two leading producers of cocoa beans discussed the possibility of cooperating to boost the price of cocoa. If Ghana and Ivory Coast formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be Ghana's production and profit? f) What would happen to Ghana's profit if it increased its production by 1000 cocoa while Ivory Coast stuck to the cartel agreement? g) Use your answer in part (f) to explain why cartel agreements are often not successful.

A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast. Suppose that the marginal cost of producing cocoa beans is constant at GHC1000 per bag and the demand for cocoa beans is described by the following schedule. Price (GHC) Quantity (bags) 8000 5000 7000 6000 6000 5000 4000 3000 2000 1000 7000 8000 9000 10000 11000 12000 a) If there were many suppliers of cocoa beans, what would be the price and quantity? b) If there were only one supplier of cocoa, what would be the price and quantity? c) At a meeting in October 2017 in Accra, the leaders of the two leading producers of cocoa beans discussed the possibility of cooperating to boost the price of cocoa. If Ghana and Ivory Coast formed a cartel, what would be the price and quantity? If the countries split the market evenly, what would be Ghana's production and profit? f) What would happen to Ghana's profit if it increased its production by 1000 cocoa while Ivory Coast stuck to the cartel agreement? g) Use your answer in part (f) to explain why cartel agreements are often not successful.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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