The Demand for Coffee

THE DEMAND FOR COFFEE

Abstract

Historically , the demand for Coffee is impacted by several variables and there have been events or economical factors that influenced its demand Coffee is a beverage with no clear substitute and shows inelastic demand in the face of price changes

Coffee is a beverage that is brewed from coffee beans and is available in different flavors . It has been consumed over many centuries and is now a daily part of the American diet . Coffee demand in the USA is affected by a number of factors including

: price , habits , flavor availability of substitutes , and elasticity of demand . Factors also affecting the supply of coffee includes : access to markets , pricing and climatic conditions . Coffee has been observed to have relative price inelasticity . This means that demand fluctuate much less than the change in price . For example , let 's assume that the demand for coffee is twenty million kilograms each year . If the price per kilogram of coffee were to move from 1 .00 to 2 .00 due to bad weather in the coffee producing countries , the demand for coffee may shift to sixteen million kilograms See chart below . This shows that the percentage change in demand is much less than the sharp increase in price for Coffee . The point of equilibrium is shown where supply meets demand . You will noticed that as the price changed from one Dollar to Three Dollars , the supply curve shifts up to the left and the new demand is now sixteen million...