Final answer:
A decrease in the supply of coconut leads to higher prices, which can affect the price of coconut-containing products such as German chocolate cake. Similarly, in the cocoa market, a supply decrease due to a drought coupled with increased demand from positive health studies results in higher cocoa prices.
Step-by-step explanation:
When the supply of coconut, an ingredient in German chocolate cake, decreases, the result is typically an increase in its price. This outcome is due to the law of supply and demand. In this scenario, the supply curve would shift to the left, indicating a reduction in supply. Assuming the demand for coconuts or coconut-based products remains the same, the intersection of the demand curve with the new supply curve would occur at a higher price point. Consequently, the price of coconuts would rise, potentially affecting the price of products that include coconuts as an ingredient, such as German chocolate cake.
In a related situation in the cocoa market, if countries producing cocoa experience a drought, the supply of cocoa would decrease. At the same time, if a new study reveals the health benefits of cocoa, the demand for it would increase. Both these factors—a decrease in supply due to drought and an increase in demand due to positive health claims—would lead to a higher price for cocoa. Graphically, the demand curve would shift to the right while the supply curve shifts to the left. The intersection of these new curves would indicate a higher price and a different quantity bought and sold in the market.