Easter Egg Prices Rise by Around 5 Per Cent over Last Year

Read the article entitled ‘Easter egg prices rise by around 5 per cent over last year’,
Herald Sun, Karen Collier, March 06th 2010 and answer questions 1, 2 and 3.
• Answer all questions in your answer booklet.
Easter egg prices rise by around 5 per cent over last year
CHOCOLATE lovers are being slugged more for many of their favourite
Easter treats this year.
Manufacturing giant Cadbury blames a massive rise in world cocoa and sugar costs,
and the recession, for average 5 per cent price increases for most of its Easter
The impact has added about 5c to 30c to scores of top sellers on store shelves.
For example, a Cadbury Dairy Milk Bunny cost $4.49 last Easter but will set back
parents $4.71 this year.
Major supermarkets Coles and Woolworths last night confirmed the wholesale price
rises had been passed on to shoppers.
Cadbury spokesman Daniel Ellis said the cost of cocoa had surged 150 per cent in
the past three years, while sugar was up 120 per cent.
Mr Ellis said demand had soared during the world downturn, as chocolate was
considered a comfort food in times of economic stress. This, along with more
investor interest in raw commodities, had pushed prices skywards.
Confectionery Manufacturers Association chief Trish Hyde said the rest of the
industry faced similar pressures to raise chocolate prices.
Mr Ellis said many of the company's 80 Easter products had increased.
"Despite our best efforts to keep costs down, unfortunately the increases of raw
ingredients continues to rise to unprecedented levels," he said. ECO11 Principles of Economics SP1 2011 Assignment 1Page 5 of 6
1. Assuming a competitive market, explain with the aid of a market model how
the price and quantity of eggs is established. (5 marks)
2. Assuming pure competition, explain and clearly discuss the factors causing
rises in the price of Easter eggs compared to the previous years. Please be
sure to discuss and clearly...