Question

Which of the following will definitely occur in the coffee market if coffee producing countries experience an exceptionally good harvest at the same time a new study is released demonstrating the health benefits of coffee?
Select the correct answer below:

A) The equilibrium price of coffee will rise.

B) The equilibrium price of coffee will fall.

C) The equilibrium quantity will increase.

D) The equilibrium quantity will fall.

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Answer 1

Which of the following will definitely occur in the coffee market if coffee producing countries experience an exceptionally good harvest at the same time a new study is released demonstrating the health benefits

A) The equilibrium price of coffee will rise.

Answer 2

Answer:

A) The equilibrium price of coffee will rise.

Explanation:

This is most likely what is going to happen if coffee producing countries experience an exceptionally good harvest at the same time a new study is released demonstrating the health benefits of coffee. It is likely that under these circumstances, the demand for coffee will increase, as people will be interested in experiencing those health benefits. It is also likely this increased demand will be met by the producers due to their successful year. Therefore, the equilibrium price of coffee will rise.