Tag Archives: Wine

SUPPLY AND DEMAND ASSIGNMENT

Article: https://www.theguardian.com/business/2018/mar/09/wine-prices-to-rise-as-bad-weather-brings-worst-harvest-for-50-years

Market: Wine

Supply
In 2017, wine production hit an all-time low in more than 50 years because of both the disastrous hot and cold weather. Wine prices are expected to rise up to 30% this year since Italy, Spain and France, the world’s top 3 wine producers, had their vines destroyed by the excruciating weather conditions. In this situation, the supply determinant, cost of factors of production was affected since in places such as France lost up to 90% of their harvest because the weather destroyed their vines. This causes a decrease in resources (grape vines) which causes an increase in the cost of production of wine since farmers must now compensate for the lost crops resulting in a decrease in the supply of wine. Thus, the supply curve will shift to the left and as predicted in this article, consumers can expect a 10% – 30% increase in wine prices and a decrease in quantity as well.

 

 

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