someone help me with this Q (1 Viewer)

[strawberry]

suppose that unreasonably cold winter temps in Brazil produce forst and destroy many trees. In addition suppose that new medical studies question the health benefits of consuming antioxidants found in tea. Explain what will be the combined effect, if any, of these developments on the price and quantity of coffee sold on the commodity markets.


i really need the answer to this question. I have an answer but i dunno if it's right coz every time i look at it again, i have doubts.

could someone like post what they think is the answer???

cheers

 

[Nick]

well the cold winter thing will supposedly destroy coffee plants, so the supply of factors in the production of coffee will go down, increasing the price.

the second thing, assuming people make the choice between drinking tea or drinking coffee, will lead to more demand for coffee.

so theoretically less coffee should be sold, but the price should be increased.

 

[AGB]

i would have said (on a purely theoretical basis) that the price will increase but the quantity consumed may remain the same

 

[AGB]

look at this diag.

S1 moves to S2
D1 moves to D2