Explain what happens to price and quantity of coffee

Please write a 4-5 page essay that addresses the following questions on the market for coffee. (for this case, keep it simple, don’t worry about different brands, whether it is store bought or prepared at home, etc.)

1. Explain what happens to price and quantity of coffee when the following events occur:

a. A scientific study shows that coffee contains some antioxidants.

b. Coffee plants from major producing countries are affected by drought. (fun fact: a coffee bean is a misnomer for the seed of a coffee plant)

c. The price of donuts increases.

d. In order to protect growers that have better working conditions for workers (referred to as Fair Trade), a price floor on coffee is implemented.

For each event, you must specify how it effects either demand, quantity demanded, supply, or quantity demanded. It is also important to demonstrate how the change will affect the market demand or supply curve. Also, be sure to state any assumption you are making regarding the relationship of the event and coffee.

e.g. Price of tea decrease.

Assume that tea is a substitute to coffee. If tea is cheaper, then the consumer will increase quantity demanded of tea. If consumers buy more tea, then there will be a decreased demand for coffee. This event causes a shift of the demand curve to the left. The shift will cause price and quantity of coffee to decrease.

2. Suppose Mr. Dash drinks 2 cups of coffee everyday no matter what the price. What kind of elasticity does it have?

3. Suppose that when the price of coffee increases by 30%, the percentage change in quantity demanded by consumer is reduced by 10%. Calculate the elasticity.

4. Based on your answer to #3, What happens to total revenue when the price of coffee is increased. Why?

Recall from the powerpoint presentation:

Inelastic goods (goods in which consumers are less responsive to changes in price): e < 1

Elastic goods (goods in which consumers are more responsive to changes in price): e >1

In this course, we use the absolute value of elasticity. It is always a calculated value of -1 due to the law of demand.

Case Assignment Expectations:

Use concepts from the modular background readings as well as any good quality resources you can find from the cyberlibrary or other internet search engines. Pleas be sure to cite all sources within the text and provide a reference list at the end of the paper.

Length: 4-5 pages double spaced and typed.

The following items will be assessed in particular:

Your ability to understand an application of supply and demand.

Some in-text references to the modular background material (APA formatting not required).

The essay should address each element of the assignment. Remember to support your answers with solid references including the case readings.

Module 2 -SLP

Supply and Demand of your firm

In this SLP assignment, we will examine the supply and demand of the good or service that your firm produces. Write a 2-3 page essay on the following issues:

1. Consider what your firm produces. What are some things that would change the demand for your product? Discuss at least two factors.
2. What are some things that would affect changes in supply? Discuss at least two factors.
3. How can quantity demanded be changed?
4. What kind of demand (elastic or inelastic) does the product that your firm produces have? Explain.

SLP Assignment Expectations:

Use concepts from the modular background readings as well as any good quality resources you can find from the cyberlibrary or other internet search engines. Please be sure to cite all sources within the text and a reference list at the end of the paper.

Length: 2-3 pages double spaced and typed

The following items will be assessed in particular:

Your ability to explain the difference between changes in demand and quantity demand using an example of your choice.

Some in-text references to the modular background readings (APA formatting not required).

The essay should address each element of the assignment. Remember to support your answers with solid references.