posted by Evette Johnson .
Sugar can be produced from a variety of plants. In tropical countries it is frequently derived from sugarcane. In the U.S. it is largely extracted from sugarbeets. As part of a program of economic pressure against Cuba, the U.S. has for years placed large tariff (import tax) on sugar from Cuba. some consideration is presently being given to removing this tax. Using supply and demand diagrams
A.Show the effect of such a relaxation of sanctions on the market for U.S. sugarbeets.
B. Show the effect of this move on the market for Hershey candy bars, which are produced in Hershey, PA
beet sugar and cane sugar are near perfect substitutes, ergo:
P(beet sugar) = P(cane sugar) = P(all sugar). P means price.
What happens to the supply curve for sugar with the lowered tariffs? Sugar is an input to candy. What happens to the supply curve for candy?