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A decrease in demand for coffee can be cause by:

A) an increase in demand for substitute products by younger populations
B) a more efficient yield, less beans per output, from new technological processes
C) a decrease in demand due to changing preferences for healthier products
D) all of the above

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Related questions

The market for coffee is initially in equilibrium with supply and demand curves of the usual shape. Pepsi is a substitute for coffee; cream is a complement for coffee. The following questions concern the market for coffee.
Assume that all ceteris paribus assumptions continue to hold except for the event(s) listed. Answer each question without considering the others.
 
1. Coffee is a normal good. A decrease in income will: 
 
(i) increase the price of coffee and increase the quantity demanded of coffee.
(ii) increase the price of coffee and increase the quantity supplied of coffee.
(iii) decrease the price of coffee and decrease the quantity demanded of coffee.
(iv) decrease the price of coffee and decrease the quantity supplied of coffee.
(v) cause none of the above.
 
2. An increase in the price of Pepsi will: 
 
(i) increase the price of coffee and increase the quantity demanded of coffee.
(ii) increase the price of coffee and increase the quantity supplied of coffee.
(iii) decrease the price of coffee and decrease the quantity demanded of coffee.
(iv) decrease the price of coffee and decrease the quantity supplied of coffee.
(v) cause none of the above.
 
3. A technological improvement lowers the cost of producing coffee. At the same time, preferences for coffee decrease. The equilibrium quantity of coffee will: 
 
(i) rise.
(ii) fall.
(iii) remain the same.
(iv) rise or fall depending on whether the price of coffee falls or rises.
(v) rise or fall depending on the relative shifts of demand and supply curves.

1. Select the scenarios that result in lower prices if they were to occur in isolation?

a. Higher technology, fall in the price of a substitute, decrease in the price of a complement

b. Higher productivity, lower taxes on corporations, lower expected future prices

c. Higher income for inferior goods, higher subsidies for firms, increase in tastes and preferences

d. Lower costs of production, fall in the price of substitute, reduction in consumer subsidies

2. If the price of substitute increased the result would be __________ prices, and we would say__________

a. an increase in prices, quantity demanded increased

b. an increase in prices, demand increased

c. a decrease in prices, demand decreased

d. a decrease in prices, supply increased

3. Consumers can make costly mistakes when not enough information is available. Which of the following represents a market solution to obtaining costly information?

a. Franchises

b. Advertising

c. Third party verification

d. All of the above

1. New firms entering a competitive industry will cause the price of the product to

a. fall, due to an increase in supply

b. rise, due to an increase in supply

c. fall, due to an increase in demand

d. rise, due to an increase in demand

e. (a) and (c) above are both correct

2. A perfectly competitive industry in long-run equilibrium is described as being technologically efficient because

a. firms produce at the low point on their LRAC curve

b. firms produce at the minimum efficient scale level of output (qMES)

c. firms earn more than the cost of capital

d. firms are not profitable

e. (a) and (b) above are both correct

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