The Impact of Technology and Temperature on Coffee Prices and Quantity
What happens when technology makes the harvesting of coffee beans twice as efficient and the temperature falls?
a. Pcoffee increases, Qcoffee ambiguous
b. Pcoffee decreases, Qcoffee ambiguous
c. Qcoffee increases, Pcoffee ambiguous
d. Qcoffee decreases, Pcoffee ambiguous
e. None of the above
Final answer:
Answer:
The development of technology that makes the harvesting of coffee beans twice as efficient and a decrease in temperature leading to more people buying coffee will have different effects on the price and quantity of coffee.
Explanation:
Due to the increase in efficiency in coffee bean harvesting, the production of coffee will increase. This will lead to a higher supply of coffee in the market.
On the other hand, the decrease in temperature will increase the demand for coffee. As more people want to buy coffee, the demand for coffee will increase.
Therefore, the quantity of coffee (Qcoffee) will increase and the price of coffee (Pcoffee) will be ambiguous, as the effect on price will depend on the magnitude of the increase in supply and demand.