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Use the following chart illustrating the market for coffee. Assume devastating floods in Guatemala have destroyed a significant amount of the coffee harvest intended to
Use the following chart illustrating the market for coffee. Assume devastating floods in Guatemala have destroyed a significant amount of the coffee harvest intended to be exported to the U.S. Additionally, a new report in the U.S. suggests that drinking coffee increases life expectancy. This question will ask you to diagram these effects on the market. The initial equilibrium describes the market before the flood and report is released. The new equilibrium describes the market after the flood and report are released. Use text boxes and the shape options in word to illustrate equilibrium before and after these effects. Label the initial equilibrium point E0 and the new equilibrium point E1. Similarly, label the initial demand curve DO, the new demand curve D1, the initial supply curve SO, and the new supply curve S1. Lastly, use arrows to show the direction of movement for the supply and demand curves. Market Lines Price - Quantity
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