Answer to Question #204321 in Microeconomics for Dikshya

Question

• Draw a Market supply curve for Coffee beans.  What happens to it in each of the following scenarios?   Why?
• Technology which allows cheaper and quicker processing of coffee beans
• The price of tea leaves increase
• Subsidy given to coffee producers have are reduced
• The no. of producers increases in the coffee beans market
• Government increases the minimum wages of labour workers
• Price of Coffee beans increase
• Poor natural conditions for coffee production

Answer 1

1. Technology which allows cheaper and quicker processing of coffee beans - the supply will increase and the supply curve will shift rightwards.
2. The price of tea leaves increase - the quantity supplied of coffee beans will increase as a result of increase in demand for coffee beans.
3. Subsidy given to coffee producers have are reduced - the supply will decrease and the supply curve will shift leftwards.
4. The no. of producers increases in the coffee beans market - the supply will increase and the supply curve will shift rightwards.
5. Government increases the minimum wages of labour workers - the supply will decrease and the supply curve will shift leftwards.
6. Price of Coffee beans increase - the quantity of coffee beans supplied will increase.
7. Poor natural conditions for coffee production - the supply will decrease and the supply curve will shift leftwards.