Supply and Demand- Principles of Economics

Topics: Supply and demand, Caffeine, Coffee Pages: 3 (728 words) Published: January 24, 2011
Running head: WEEK 2 ASSIGNMENT: SUPPLY, DEMAND AND PRICE ELASTICITY 1

Week 2 Assignment: Supply, Demand and Price Elasticity Melody Naomi Ramos University of Phoenix Principles of Economics ECO/ 212 Jeff Boxx July 10, 2010

WEEK 2 ASSIGNMENT: SUPPLY, DEMAND AND PRICE 2

Week 2 Assignment: Supply, Demand and Price Elasticity Identify causes for shifts in supply and demand
There are a great deal of aspects that can contribute to the shifts in the supply and demand of coffee. Coffee demand outstrips supply; coffee stocks up for commodity squeeze? Posted Feb 19th, 2009, by Sarah Gilbert, experts predicted a great increase of cost due to declining production in Brazil and Colombia productions. This would occur do to high demand by consumers. Although Starbucks says, it wont have much of an effect on there company’s costs (Starbucks does source much of its coffee through direct- trade agreements, this would have some insulation from the general commodity markets). Meaning it wont really effect Starbucks, but it will have some effect on other companies such as Kraft and Nestle, star bucks competitors. Explain the relationship and influence price per quantity demand The price of coffee can very depending on the amount demanded by consumers. It there’s a high demand then more coffee will be produced, lending to higher prices. And faster production of coffee. But if demand is low, then production will slow down, and the value will decrease. The equilibrium will also be affected as coffee can be linked to...
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