Change In Demand And Supply And Coffee Prices
Marthin Lukas S Pakpahan 29114341
Dhion Azrya Dewangga 29114434
Dini Siti Ayu Ariani 29114462
Iqbal Riantori 29114583
Change in Demand and Supply and Coffee Prices
Theoretical Basis
Law of demand The negative relationship between price and quantity demanded: As price rises, quantity demanded decreases; as price falls, quantity demanded increases.
Demand Curve A graph illustrating how much of a given product a household would be willing to buy at different prices.
Law of supply The positive relationship between price and quantity of a good supplied: An increase in market price will lead to an increase in quantity supplied, and a decrease in market price will lead to a decrease in quantity supplied.
Supply Curve A graph illustrating how much of a product a firm will sell at different prices.
Equilibrium The condition that exists when quantity supplied and quantity demanded are equal. At equilibrium, there is no tendency for price to change.
Excess demand or shortage The condition that exists when quantity demanded exceeds quantity supplied at the current price.
Excess supply or surplus The condition that exists when quantity supplied exceeds quantity demanded at the current price.
Case Resume
World wholesale coffee prices fell from $1,40 /pound in 1998 into $0,48 in June 2002 that affecting the small coffee farmers into extreme poverty. The coffee price is lower than some producers production cost so the growers didn’t receive any profit while multinational food companies gain a very high profit due to the decrease in their production cost. In many countries where coffee is the backbone of the rural economy, the price drop of coffee became a disaster. Many malnourished children beg for food at the roadside, some families have abandoned their land, while others have switched to growing drug crops in search of cash.
The problem itself is caused by supply of coffee that increased faster than its demand. When supplies exceeds the product demand,
Dhion Azrya Dewangga 29114434
Dini Siti Ayu Ariani 29114462
Iqbal Riantori 29114583
Change in Demand and Supply and Coffee Prices
Theoretical Basis
Law of demand The negative relationship between price and quantity demanded: As price rises, quantity demanded decreases; as price falls, quantity demanded increases.
Demand Curve A graph illustrating how much of a given product a household would be willing to buy at different prices.
Law of supply The positive relationship between price and quantity of a good supplied: An increase in market price will lead to an increase in quantity supplied, and a decrease in market price will lead to a decrease in quantity supplied.
Supply Curve A graph illustrating how much of a product a firm will sell at different prices.
Equilibrium The condition that exists when quantity supplied and quantity demanded are equal. At equilibrium, there is no tendency for price to change.
Excess demand or shortage The condition that exists when quantity demanded exceeds quantity supplied at the current price.
Excess supply or surplus The condition that exists when quantity supplied exceeds quantity demanded at the current price.
Case Resume
World wholesale coffee prices fell from $1,40 /pound in 1998 into $0,48 in June 2002 that affecting the small coffee farmers into extreme poverty. The coffee price is lower than some producers production cost so the growers didn’t receive any profit while multinational food companies gain a very high profit due to the decrease in their production cost. In many countries where coffee is the backbone of the rural economy, the price drop of coffee became a disaster. Many malnourished children beg for food at the roadside, some families have abandoned their land, while others have switched to growing drug crops in search of cash.
The problem itself is caused by supply of coffee that increased faster than its demand. When supplies exceeds the product demand,