In late 2004 and early 2005, the price of raw coffee beans jumped as much as 50%

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In late 2004 and early 2005, the price of raw coffee beans jumped as much as 50% from the previous year. In response, the price of roasted coffee rose about 14%. Similarly, in 2012, the price of raw beans fell by a third, yet the price of roasted coffee fell by only a few percentage points. Why did the roasted coffee price change less than in proportion to the rise in the cost of raw beans?

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Managerial Economics and Strategy

ISBN: 978-0321566447

1st edition

Authors: Jeffrey M. Perloff, James A. Brander

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