Answered: g. Graphically illustrate and explain…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter23: Price-searcher Markets With Low Entry Barriers

Section: Chapter Questions

Problem 17CQ

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g. Graphically illustrate and explain how an increase in the supply of coffee by a Third Wave
Coffee company affects the equilibrium price and quantity.

Transcribed Image Text:The following are excerpts from the article: Stirring the Pot . $80 Coffee Beans – Yikes! Bangor Times. May 22nd, 2016. “ The Third Wave in coffee refers to the growth of small, independent coffee roasters who developed as an alternative to Starbucks when that company grew and disaffected coffee drinkers looked for alternative sources for their caffeinated drinks." "..companies of this type provide a relatively small clientele with great tasting coffees and verified attributes in the sourcing of coffee beans- organic, shade-grown, bird friendly, direct trade (it's better than fair trade), single-farm sourced, etc". "For a Third Wave coffee company, the goal is to satisfy existing consumer interest or create new consumer interest in attributes that its customers believe only that company can offer." ...firms are always trying to create new and better differentiation to set themselves apart from those who have been successfully earning monopoly profits. This very phenomenon is seen as Third Wave coffee companies differentiated their brands from Starbucks as it grew beyond its original ethos as a brand."

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