Nutella and Hazelnuts A key ingredient of Nutella is hazelnuts which are grown mostly around the Black Sea in Turkey. Nutella uses about a quarter of the world crop. Two things have occurred recently. Nutella is becoming more popular worldwide and a frost destroyed much of this season's crop. How do these occurrences affect the market for hazelnuts?
The increased popularity of Nutella shifts the demand curve to the right. The frost has shifted the supply curve to the left. Both serve to cause increases in hazelnut prices, but we cannot tell if the demand shift causes quantity to increase more than the frost causes quantity to decrease.
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Exhibit 1A-8 Straight line relationship
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