Coffee Supply, Demand and Price Elasticity Essay

Words: 1004
Pages: 5
Open Document
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…
The coffee provides these people their daily dose of caffeine that keeps them going. The substitutes for coffee can be tea, which is gaining a lot of popularity as it has lower amounts of caffeine and has other health benefits as compared to coffee. Also, the other substitutes for coffee in current market are caffeine shots like 5-hour energy supplements. These other substitutes for coffee are readily available in market and lots of people are switching from coffee to other supplements.
The necessity of a good by itself increases the price of the good but its availability is supposed to balance the things out and the availability of substitutes in the market keeps the price of the good in check in the market. Since price elasticity measures the responsiveness of the quantity demanded of the commodity when there is a change in price, the availability of substitutes makes the onset of equilibrium price easy and keeps the price elasticity in check. The reason for this is if the price of the coffee increases too much, if the proper substitutes are available as discussed above readily, people would switch over to the substitutes leading to lowering of demand and ultimately leading to the lowering of price for coffee back to the equilibrium price.
Conclusion
Now that we all have a better understanding of coffee, one can see just how influential this
Show More

Related Documents: Coffee Supply, Demand and Price Elasticity Essay

The Basics Of Supply And Demand

Basics of Supply and Demand Introduction What are supply and demand? What is the market mechanism? What are the effects of changes in market equilibrium? What are elasticities of supply and demand? ©2005 Pearson Chapter 2 2 Topics to Be Discussed How do short-run and long-run elasticities differ? How do we understand and predict the effects of changing market conditions? What are the effects of government intervention – price controls? ©2005 Pearson Chapter 2 3 Supply and Demand  Supply…

Words 3848 - Pages 16

Supply and Demand and Demand Curve Essay

and P = $3.33 9) A good's Demand Curve is: Qd = 25 - P, and its Supply Curve is: Qs = 10 + 2P. a. When P = $20, what is the difference, if any, between Qd and Qs? b. When P = $3, what is the difference, if any, between Qd and Qs? c. What are the equilibrium values of P and Q? Answer: a. Qd = 5 and Qs = 50 b. Qd = 22 and Qs = 16 c. Q = 20 and P = $5 10) List the major non-price determinants of demand. Answer: Consumer preferences (tastes), income, prices of related goods (complements…

Words 2863 - Pages 12

EC120 S Essay

outreach@studentsofferingsupport.ca to see if there is a trip that can work! JOIN US TODAY! AGENDA 1. 2. 3. 4. 5. 6. Ten principles of Economics Thinking like an Economist Interdependence and the gains from trade The market forces of Supply and Demand Elasticity and its application Supply, Demand, and Government policies – Answer any questions – A few examples – Leave you with the package 6 Chapter 1 Ten Principles of Economics 7 How people make decisions 1. People face tradeoffs – Going to fox on Tuesday…

Words 3950 - Pages 16

Project 1 Essay

Project 1 Gasoline prices have been known to fluctuate from time to time. There are several causes for this. One of the reasons that I can think of would be the increase in price of crude oil. When the crude oil prices increase, the price is passed on to the wholesalers, who in-turn, passes on the cost on to consumers. Crude oil prices are determined by supply and demand with a great deal of influence coming from the Oil Producing and Exporting Countries (OPEC) as they decide on how much oil…

Words 1270 - Pages 6

Practice Problem Set Essay

macro and microeconomics, demand and the quantity demanded. Work through the problems and applications. Review PowerPoint lectures. Review lab notes (hopefully you’ve taken some!). Review your problem sets. Review your quizzes. Review Questions Set : 1) The price of coffee increases. Ceteris parabis, this will cause: a) the demand for coffee to decrease b) the demand for coffee to increase c) the quantity of coffee demanded to increase d) the quantity of coffee demanded to decrease…

Words 1222 - Pages 5

Essay on Marginal Cost and Gas

attached to it, and the potential risks to the business. Gas is an essential commodity in the market that has created controversial issues each time there is a price change (www.ehow.com). This paper will present a business proposal proposing gas as its commodity. It will review on the market structure, the elasticity of demand and supply for gas, present the fixed and variable costs, marginal cost and marginal revenue, and suggest non-pricing strategies for gas as a sample commodity. Market Structure…

Words 933 - Pages 4

Essay about Supply And Demand

Savage Supply and Demand August 12, 2013 Eco/365 Chris Foster Introduction There were two microeconomics and two macroeconomics concepts in the simulation. Atlantis is a microeconomics apartment company which manage apartment complexes and homes in the city. Atlantis had one shift supply curve and one shift in the demand curve when business started moving into the city. These shifts affected the equilibrium price, quantity, and decision making with the demand needed to supply to consumers…

Words 741 - Pages 3

Essay on Ethical Issues in Business

This is important for businesses along the supply chain as well, in order to “stay ahead of the curve” when making strategic business decisions. Chapter 5, Question 17 Assuming there is a large rise in the demand for computer chips and potato chips. Potato chips manufacturers will be able to respond to a rise in demand quicker than a computer chip manufacturer. This is due to the fact that potatoes are more readily available,…

Words 966 - Pages 4

Economic Project Paper 1

********* Business Economics GM545 Fall 2013 Session ***********@yahoo.com Back in 2005, the housing market was at an all-time high. The demand for houses was growing even while prices were jumping. However, one of the determinants for demand was not due to income rising, it was due to unethical business practices by mortgage companies. These mortgage companies would lend money to borrowers who couldn’t afford the loans due to the terms of the contracts. Then in 2008, a bubble was burst…

Words 779 - Pages 4

What Is Elasticity Of Demand

A1. Elasticity of Demand. The law of demand tells us that consumers will buy more of an item when prices decline and less of an item or product when prices increase. How much more or less consumers will buy varies from product to product along with the change in price. When a restaurant increases or decreases their prices, the consumers are very quick to notice and choose to continue to eat at the same restaurant or another restaurant based on a decrease or increase in price (McConnell & Brue…

Words 5335 - Pages 22