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Unformatted text preview: U w þ J V coffee drinker ª· wþ J ·ª In this argument a consulting firm recommends the transfer of investments from Cola Loca to Early Bird Coffee because, during the next 20 years, coffee demand will increase while cola demand will decrease. This prediction is based on the expectation that the number of older adults will significantly increase over the next 20 years, together with statistics, reportedly stable for the past 40 years, indicating that coffee consumption increases with age while cola consumption declines with increasing age. For three reasons, this financial advice may not be sound. First, the argument assumes that relative supply conditions will remain unchanged over the next twenty years. However, the supply and cost of cola and coffee beans, as well as other costs of doing business as a producer of coffee or cola, may fluctuate greatly over a long time period. These factors may affect comparative prices of coffee and cola, which in turn may affect comparative demand and the value of investments in coffee and cola companies. Without consider...
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This note was uploaded on 05/05/2009 for the course ECAS asdfasdf taught by Professor Asdfaf during the Spring '09 term at Academy of Art University.
- Spring '09