If there was a baby boom of Oompa Loompas ready to work for free, what will happen to the Willy Wonka chocolate market? In particular: Has this affected supply or demand of Willy Wonka Chocolate? What has happened to the price of Willy Wonka chocolate? Please describe the graph of your answer by change in either supply or demand, as well as the change in price
Assuming the question means that production cost is much reduced, and that demand does not change, then the supply curve moves to the right, resulting in a lower equilibrium price.
See, for example, graph 1 of
http://www.econport.org/content/handbook/Equilibrium/shifts-graph.html
To analyze the effect of a baby boom of Oompa Loompas on the Willy Wonka chocolate market, we need to understand the concept of supply and demand and how they interact.
Supply refers to the quantity of a product that producers are willing to produce and offer for sale in the market. Demand, on the other hand, refers to the quantity of a product that consumers are willing to purchase at a given price.
If there were a baby boom of Oompa Loompas ready to work for free, it would likely increase the supply of Willy Wonka chocolate. More Oompa Loompas would mean increased production capacity, leading to a higher quantity of chocolate being produced. This increase in supply would cause a shift in the supply curve to the right.
The increased supply of Willy Wonka chocolate could potentially affect the demand for the product. If the demand remains constant, the market would experience an increase in quantity supplied, but the price may not change significantly. However, if the increased supply leads to a decrease in price, it could stimulate greater demand as consumers are more willing to buy the product due to its lower cost. In this case, the demand curve would shift to the right.
As for the graph, imagine a typical supply and demand graph with price on the vertical axis and quantity on the horizontal axis. Initially, the supply and demand curves are intersecting at a certain price and quantity point. When the baby boom of Oompa Loompas occurs, the supply curve shifts to the right, representing the increase in supply. If the demand curve remains unchanged, the market equilibrium will move to a new point further to the right on the horizontal axis, indicating a higher quantity supplied with a similar price. However, if the demand also increases due to lower prices, both the supply and demand curves will shift to the right, resulting in a larger increase in quantity supplied and a decrease in price.
It's important to note that the exact impact on the Willy Wonka chocolate market would depend on numerous other factors, such as consumer preferences, competition, and market dynamics. This analysis provides a general understanding of the potential impact based on the concept of supply and demand.