Essay on Supply and Demand, Markets, Prices and Price Setting

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Supply and Demand, Markets, Prices and Price Setting
Cirilo "Lee" E. Montano
Trident University
Microeconomics
ECO201
Allison Kaminaga, Ph.D.
December 10, 2012
Explain what happens to price and quantity of coffee when the following events occur:
1. An advertising campaign highlights scientific studies that find drinking coffee can help reduce weight gain. a. What do you think would happen?
People will buy more coffee, drink more coffee, and research what coffee will help them lose more weight. Case in point, does espresso assist in more weight loss then normal coffee? Espresso contains more caffeine, so the thought process might be, that you can lose more weight by drinking espresso than you would drinking your everyday run
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So, if that is the general consensus among the British then tea is about to be stock piled in tea drinking countries because there is going to be a huge sale. I know there will not be enough tea drinkers in these countries to keep the cost of tea at its current price. There are obese people all over the world who want to lose weight and even skinny people want to stay skinny. “As we have seen, when either the demand or the supply curve shifts, the results are unambiguous; that is, we know what will happen to both equilibrium price and equilibrium quantity, so long as we know whether demand or supply increased or decrease. However, in practice, several events may occur at around the same time that cause both the demand and supply curves to shift in the same direction or opposite directions” (CITE).
d. In order to protect growers that have better working conditions for workers (referred to as Fair Trade), a price floor on coffee is implemented.
The explanation for fair trade,” refers to the movement to improve the lives of growers and other producers through trade.” http://www.ssireview.org/articles/entry/the_problem_with_fair_trade_coffee This system is not the most popular system amongst some growers. Growers say that fair trade is not living up to the promise of reducing poverty. I would say if you put a fair price on anything, you are going to make a decent amount of money, especially on coffee if it really made
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