Price of coffee REV - Price of coffee verses the size of...

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Price of coffee verses the size of the economy. Question: 1.1 P 80 90 100 110 120 Qd 680 640 600 560 420 Qs 580 640 700 760 820 Question 1.3
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A number of factors in the economy influence the existing prices of commodities at various levels. This can be witnessed through the measures adopted by the government to dictate the size of the economy so as to induce desirable coffee price levels that meets the economic levels of the final users. Firstly, the existing demand in the economy dictates that prices of coffee that will exist in the markets. During instances of high demand in the economy, it is expected that coffee prices will become high as this attracts competition in the market. On the other hand, during situations of low demand for commodities in the economy, the resulting coffee prices will be relatively low. The sensitivity of demand and prices of coffee is normally high sensitivity since coffee is a consumer commodity. Another factor that is made pronounced to influence the coffee prices is inflationary tendencies in the economy. At high inflation, every economy experiences
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