Essay about Coffee Supply, Demand and Price Elasticity

Coffee Supply, Demand, and Price Elasticity Team B: Walelia Naholowa’a, Priscilla Swanson, Delniece Williams, Nigel Sturge ECO/212 Robert Coates February 26, 2012 Coffee Supply, Demand, and Price of Elasticity Statistics show that over half of the American population consumes coffee on a daily basis. You may drink coffee hot, cold, mixed, or even in a frappuccino. Individuals are able to make coffee at home, or buy it on the go. Coffee provides people with caffeine, which ultimately gives energy for hardworking people all around the world. The main focus for this paper will cover the following topics, with coffee as the basis: causes for shifts in supply and demand, how coffee supply and demand influence price, quantity,†¦show more content†¦Changes in the equilibrium price and quantity depend on exactly how the curves shift (Berkeley University, n.d.). How supply and demand influence price, quantity, and market equilibrium These shifts in supply and demand would influence price, quantity, and market equilibrium because of the natural disasters, shift in prices or speculation the supply of coffee decreases, which would cause a significant product shortage for consumers. Due to a shortage, consumers would to pay higher prices in order to purchase coffee and all coffee producers would then demand a higher price in order to produce more products. Higher prices are beneficial to the producers of the product, but consumer would purchase fewer products. Lower product pricing would discourage coffee production, but would benefit consumers. Both supply and demand would balance consumption, which is demand and production, which is supply. Market speculation would also drive the price of coffee up or down. For instance a study issued by the Harvard medical school in August 2004 states that â€Å"coffee consumed in moderation is safe and offers health benefits such as lowering the risk of gallstones and type two diabetes, and reduced cancer risk for women.† This speculation because of the health benefits publish may drive the market price of coffee.Show MoreRelatedSupply, Demand and Price Elasticity of Coffee1001 Words   |  5 Pagesoften have is: where is the coffee? The price of coffee fluctuates no matter what quantity is sold. The following paper will discuss what makes the price of coffee rise and what consumers do when the price is more than they are willing to pay. Many factors are taken into consideration when the price of coffee is being determined. The main two factors are the supply that is demanded and the availability of substitutes, which will be discussed below. Coffee is a commodity enjoyed allRead MoreThe Supply And Demand Curve951 Words   |  4 PagesA shift on the supply and demand curve will subsequently effect pricing, an example of this is the increase of coffee supply in 1998. Using data collected by the ICO, it is found that supply of coffee increased from 99,550 (in thousand 60 kg bags) in 1997/8 to 108,858 (in thousand 60 kg bags) in 1998/9. This can be explained due to an increase in suppliers with the addition of Yemen, Guyana and Loa, this will affect total production by increasing coffee producing countries, whilst simultaneouslyRead MoreDemand Curve, Supply Curve Equilibrium. The Demand Curve995 Words   |  4 PagesDemand Curve, Supply Curve Equilibrium The demand curve can be shown in a graph and it reflects the relationship between the price and amount of a commodity that people are able and willing to buy at a set price. The demand curve slopes downward because are more prone to buying a good as the price declines. For example, coffee drinkers may be willing to buy more cups of Starbucks coffee if a medium cup of regular coffee sells for $1.49 versus $2.10. Instead of buying one cup a day they may buyRead MorePrice Elasticity and Supply Demand Price Elasticity and Supply Demand1382 Words   |  6 PagesAssociate Level Material Appendix B Price Elasticity and Supply Demand Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video tutorials as a tool to help you answer questions about the changes in price and quantity Event Market affected by event Shift in supply, demand, or both. Explain your answer. Change in equilibrium Frozen orangeRead MoreMarket Trends And Demand For Coffee Essay1398 Words   |  6 Pagesindividuals consume 66 percent of the world s coffee and spend half of their nonessential income on fast food, and specialty coffees. Thus, according to the Specialty Coffee Association of America reported, that the retail sales in coffee reached 17,400 in 2003 which was an increase of 4 percent more than in 2002. Thus, the market for specialty â€Å"coffee grew from $7.53 billion in 1999 to $8.96 billion in 2003† (Holmes, 2012). Even the gross revenue of specialty coffee rose from 9 percent in 2000 to 16 percentRead MoreThe Global Coffee Market: Demand and Supply Conditions911 Words   |  4 PagesBackground Coffee has long been one of the most sought-after commodities. Spreading north from Ethiopia and Yemen, coffee first gained popularity in the Arab world as a stimulant drug that was not banned in the Quran. It arrived in Europe via the Ottoman Empire and quickly became a drug of choice not just in Europe but in the area that the European cultures colonized. Production of coffee soon spread around the world, particularly in regions colonized by the French and Spanish. As a result, itRead MoreThe Price Of Coffee Prices1551 Words   |  7 Pagesthat determine the supply of the products and detail the future outlook of the supply curve. To ensure compliance with Starbuck’s rigorous coffee standards, Starbuck’s controls coffee purchasing, roasting, and packaging, and the global distribution of coffee used in their operations. Starbuck’s purchases green coffee beans from multiple coffee-producing regions around the world and custom roasts them. The price of coffee is subject to significant volatility. Supply and price can be affected byRead MoreCoffee Consumption in USA1265 Words   |  5 PagesSynopsis National coffee drinking trends statistics in 2012 shows a tremendous increase in the consumption of coffee in the country. The data show a general increase in all demographics consumption behaviors. Significant increase is in age groups 18 to 39 with the largest jump in consumption observed in gourmet coffee. The data from the national coffee association (NCA) show current behaviors of coffee consumption such as single cup brewing taking the lead in coffee taking style. Data collectionRead MoreHomework Ecn 2111655 Words   |  7 Pages Assume the demand for watermelons is downward sloping. A decrease in price from $3 per pound to $2 per pound [A] could have been caused by an increase in supply. [B] will cause an increase in supply. [C] will cause a smaller quantity of watermelons to be demanded. [D] will cause demand to decrease. [E] will cause demand to increase. 5. If the equilibrium price decreases and the equilibrium output decreases then what must have happened. A) Demand increased B)Read MoreStarbucks : A Global Coffee Company930 Words   |  4 Pagesglobal coffee company and coffeehouse chain based in Seattle, Washington since 1971. It is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with almost 21,366 stores in 63 countries. A recent survey says that in last 30 days 32 million people visited the store across the globe. Thus, it is a highly busy and in demand coffee shop. Here I am going to do microanalysis of Starbucks as a largest coffeehouse chain/industry in the world considering its demand and supply in the