Quantity (cups/hour) The figure above refers to the market for coffee. What might cause shift from the original supply curve to the new supply curve? Check all that apply. An increase in the price of tea (a substitute for coffee). An expectation that coffee prices will fall in the future. A decrease in the price of coffee beans. A storm in that wipes out a large part of the coffee crop. A new technology that reduces the cost of making coffee.
Quantity (cups/hour) The figure above refers to the market for coffee. What might cause shift from the original supply curve to the new supply curve? Check all that apply. An increase in the price of tea (a substitute for coffee). An expectation that coffee prices will fall in the future. A decrease in the price of coffee beans. A storm in that wipes out a large part of the coffee crop. A new technology that reduces the cost of making coffee.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The graph displays the market for coffee, illustrating shifts in supply and demand. The horizontal axis represents the quantity of coffee in cups per hour, ranging from 0 to 90. The vertical axis shows the price in dollars per cup, ranging from 0 to 4.
- **Original Supply Curve**: This is represented by a solid line sloping upwards from left to right, indicating the original relationship between price and quantity supplied.
- **New Supply Curve**: Displayed as a dashed line, this curve is positioned to the right of the original supply curve, suggesting an increase in supply at each price level.
- **Original Demand Curve**: This is a solid line sloping downwards, showing the original relationship between price and quantity demanded.
- **New Demand Curve**: Represented by a dashed line to the right of the original demand curve, indicating an increase in demand at each price level.
Below the graph is a question related to the observed shifts:
"The figure above refers to the market for coffee. What might cause the shift from the original supply curve to the new supply curve? Check all that apply."
Possible options:
1. An increase in the price of tea (a substitute for coffee).
2. An expectation that coffee prices will fall in the future.
3. A decrease in the price of coffee beans.
4. A storm that wipes out a large part of the coffee crop.
5. A new technology that reduces the cost of making coffee.
This section is designed to encourage users to consider factors that could influence supply and demand shifts in the coffee market.
Expert Solution
Step 1: Introduction
The link between the amount of a product provided and its price, while maintaining other variables constant, is depicted graphically by the supply curve. The link between the amount of a product that is demanded and its corresponding price is shown by a demand curve. The equilibrium point in the market is the point where these two curves meet.
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