Question 14 chapter 3 p 80-

Question 14 chapter 3 p 80- - Exercise 3: Question 14...

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Exercise 3: Question 14 chapter 3 p 80: As Starbucks introduces a new premium blends, the demand for premium coffee rises and moves to a new equilibrium point. The new premium blends cause consumers to crave coffee and shifts the demand curve outward or demand curve will shift to the right. This will mean that the equilibrium price and quantity both will go up. This causes the quantity sold to increase as well as the price, since sellers have to work hard to produce the larger amount of premium coffee. Initially, Starbucks quickly sells out its premium blends. It raises its price as it works to increase production. Here, Price ↑ Quantity demanded ↑. Eventually, it is able to provide sufficient premium coffee to meet the higher demand levels. If the premium coffee crop were destroyed due to hard freeze, clearly this will affect the supply of the premium coffee that will shift the supply curve to the left bringing the production of premium coffee to a halt. As the supply curve shifts
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Question 14 chapter 3 p 80- - Exercise 3: Question 14...

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