UK0,M<$b@mevgɦmJ8s =-bU#b5')byiDz)%2.&_NKpGtJ|QGdr:>Fj0rA ؞F&!| 4`,mz3[
In the News

Price hike in vanilla from Madagascar due to changes in conditions of supply

The British love their vanilla from Madasgascar - it has a distinctive smooth texture and taste that we seem to particularly enjoy. However, changes in conditions of supply are causing a rise in its price. This, in turn, could lead to an increase in products that use vanilla as a major ingredient, such as ice cream.

According to this article from the Guardian, the price of vanilla from Madagascar could rise by 150% due to a poor harvest and the fact that some farmers are harvesting early in attempt to prevent potential thieves stealing crops.

For students about to take their AS exams, this might be a nice example of a product with changing conditions of supply. Some points:

* It shows how climate can impact on the supply and price of a product

* It shows how the price of one product (e.g. ice cream) is impacted upon by the price of a component resource

* The article suggests that the demand for vanilla may be price inelastic. Consumers are not prepared to swap to alternative artificial flavours and may be prepared to pay higher prices for ice cream with real vanilla included.

* You could argue that vanilla is supply inelastic as well. The process is labour-intensive and supply is hampered by the time it takes to dry out the initial pods before they can be used (6 months).

Possible diagrams that could be used:

I'm all right. I'm a Rum and Raison man. Honeycomb at a push. What's that? They have vanilla in the source ice cream as well? Shoot!

Subscribe to email updates from the tutor2u Economics

Join 1000s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uEconomics on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.

Job board

Head of Economics and Business

Leighton Park School, Reading

Teaching Vacancies

Recruitment

Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u