1.the worst drought in decades hit Brazil's coffee belt region, destroying crop yields and causing the price of coffee to shoot up by more than 50 percent so far this year." Explain why the price of coffee would rise in this case by explaining what impact this has on the demand and supply model of the coffee market.
2"At the beginning of the year, a closely watched report by a commodities trading firm noted that the global coffee market could face a shortage for the first time in three years. The report predicted that coffee supplies will be about 5 million bags lower than consumption for the 2014-15 season." Explain using the supply and demand model what a shortage means and how it could lead to higher prices. "
3.it used to be that the developing world made coffee and the developed world drank it. But now, countries like Brazil, which traditionally only produced coffee, are starting to consume it, too." Use the supply and demand model to make a prediction about what will happen to price and quantity in the market for coffee as new consumers enter the market.
1. The supply would have decreased and shifted to the left, when this occurs and demand remains unchanged than the price... View the full answer