question archive The table shows data on the market for coffee in 2013 and 2014
The table shows data on the market for coffee in 2013 and 2014
Subject:MarketingPrice:2.88 Bought3
The table shows data on the market for coffee in 2013 and 2014.
| Year | Quantity of Coffee | Price of Coffee |
|---|---|---|
| 2013 | 19.4 | 1.04 |
| 2014 | 18.7 | 1.35 |
Why did the price of coffee rise in 2014?
The price of coffee rose for all of the following reasons except
A. The coffee market is a global with many producers and many consumers.
B. If coffee growers raised the price with no change in demand, a surplus of coffee would arise and the price would fall.
C. Greedy coffee growers raised the price and displaced the law of market forces.
D. A decrease in supply raises the equilibrium price and decreases the quantity, which describes the data in the table.
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The answer is B).
In general, the price of a good in a market would rise if (1) there is an increase in demand or (2) there is a reduction in supply. Thus when there is a surplus in coffee due to increased supply, the price of coffee will fall instead of rise, hence B) cannot be the reason coffee price increases.
