This article in the WSJ (Dec. 2019) uses supply and demand analysis to explain why the price of EVO has decreased recently. It points to two mail culprits: a bountiful harvest and Trump's tariffs. The effect of a bountiful harvest is easy to illustrate: a bountiful harvest increases supply. The effect of tariffs is trickier.
When consumers pay a tariff, the demand curve shifts down by the amount of the tariff. For example, if the quantity demanded is 100 when the price is $25 and the tariff = $0, the quantity demanded is 100 when the price is $15 and the tariff = $10. The height to the new demand curve is the price paid to the producer. The difference is heights between the old demand curve and the new demand curve is the tariff. The height to the original demand curve shows the price paid by consumers when the tariff applies. It equals the sum of the price paid to the producer and the tariff.
The tariff decreases the price received by producers and increases the price paid by consumers. The decrease in the equilibrium price means that the price paid to the producer falls. However, the decrease in the equilibrium quantity means that the height to the old demand curve increases. Therefore, the price paid by consumers increases: the sum of the new equilibrium price and the tariff is greater than the original equilibrium price.
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