By what percentage did the quantity of coffee change

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Reference no: EM132113418

Question: Answer the following questions:

a. Looking at Fig. 1 on p. 99, explain what 1 must have happened in 2014 to the supply of coffee.

b. Given the information in Fig. 1 and the estimated elasticity of demand for coffee, by what percentage did the quantity of coffee change in 2014 and in which direction?

c. The news article says that farmers' revenue shrank as the price of coffee fell. Explain why this fact tells us that the demand for coffee is inelastic.

d. How does the total revenue test work for a rise in the price? What do you predict happened to total revenue in 2014? Why?

e. Coffee isn't just coffee. It comes in different varieties, the main two being Arabica and Robusta. Would you expect the elasticity of demand for Arabica to be the same as the elasticity of demand for coffee? Explain why or why not.

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Reference no: EM132113418

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