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Supply and demand for butter in France

Penny Brooks

1st November 2017

Quelle horreur - there is a shortage of butter in France.

Pourquoi? Well, BBC correspondent Hugh Schofield identifies a number of reasons for a shift in both demand and supply in this article, which could be used as the source of a number of classroom questions:

1. What factors have caused a change in demand?

2. What factors have caused a change in supply?

3. How price elastic (i.e. responsive to a change in price) do you think that demand and supply will be?

4. Draw a graph to show those changes in demand and supply, and the likely effects on both equilibrium price and quantity in the market for butter in France.

5. Using the graph in the article which shows the EU average butter prices, calculate the percentage increase in price between April 2016 and October 2017.

6. With reference to the article, explain why French butter producers are selling their product abroad.

As an extension exercise, you could add this article published in the Independent back in June this year, which considers the impact on industries using a lot of butter as an ingredient such as baking and patisserie, represented by the Federation des Entrepreneurs de la Boulangerie, who have suggested that dairy producers should be 'ordered' to make more butter. What other solutions can your students propose?

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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