Answer to Question #142705 in Economics for Dylan

Question

With the aid of a demand and supply diagram, explain how the world price of
coffee might be expected to change by the end of 2013.

Answer 1

A leaf rust epidemic in Central America in 2013 affected the coffee harvest. The volume of collected coffee has decreased by about 20%.

Demand remained unchanged, supply decreased, which led to higher prices and a decrease in sales.