Sunday, March 16, 2008

Unit 1 Changes in the champagne market

The Guardian reports that the area within which champagne grapes can be grown is to be increased

http://www.guardian.co.uk/business/2008/mar/14/fooddrinks.france

a) How would you describe the supply of land to grow campagne currently?
b) Using a S&D diagram, explain the effect on the market price of champagne that will arise when this new land produces champagne grapes
c) Why might your prediction not actually occur?

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