The price of wine is dropping fast
Questions
- What are the grapes sold on the secondary market used to produce?
- How has the supply of grapes changed since 2016? How does this change influence the market for wine?
- Why has wine consumption decreased? How does this change influence the market for wine?
- Explain why your answers to #2 and #3 result in “oversupply” at the initial price. Describe how the market moves to its new equilibrium.
- Draw a graph to illustrate your answer to #4.