• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

"Using demand and supply diagrams explain recent changes in the price in coffee"

Extracts from this document...

Introduction

Economics "Using demand and supply diagrams explain recent changes in the price in coffee" Introduction A market exists wherever there are buyers an sellers of a particular good. Buyers demand goods from the market whilst sellers supply goods onto the market. Demand is the quantity of goods or services that will be bought at any given price over a period of time. The demand curve is downward sloping, showing that the lower the price, the higher will be the quantity demanded of a good. Demand curve Supply in economics is defined as the quantity of goods that sellers are prepared to sell at any given price over a period of time. The supply curve is upward sloping, showing that firms increase production of a good as its price increases. ...read more.

Middle

Equilibrium is the point where the demand and supply curves cross. This is the central point where expectations are being realised. The reasons behind the countries having a larger supply are that the coffee crop takes between 3-7 years before it is ready to be picked. In 1998 the market was at a point of equilibrium, the coffee that was planted back as far as 1991 was supplying the demand, but by 2000 the coffee they had planted was oversupplying the market. The market demand is around 1.6% per annum so the market is growing each year but not at a rate high enough to meet the supply. Demand is less than supply. Supply rising faster than demand In the coffee market there has been a significant rise in market supply this has caused a shape fall in the market prices. ...read more.

Conclusion

Also putting pressure on the price of coffee was the poorer producers offloading there excess output onto the market mean as the supply is higher the demand is lower so the price has to fall. Immediate supply- momentary supply is fixed Conclusion The major impact on the price of coffee is the over production. the market for coffee doesn't grow sufficiently per annum to take the large supplies of coffee that are coming into the market, as the supply exceeds the demand the price of coffee is brought down. The demand for coffee is relatively inelastic. The net result is a loss of total revenue for the main coffee producers many of whom have to exist on a very low income anyway. The countries that have been the major contributors to the market flooding have caused there own revenue to fall as well as the rest of the coffee markets. Scot Varley 1.36 Economics 06/05/2007 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Here's what a star student thought of this essay

4 star(s)

Response to the question

This essay engages well with the question. It has a good introduction defining a market, and uses diagrammatical analysis strongly to show why shifts in demand and supply will cause a change in the equilibrium. If this essay wanted to ...

Read full review

Response to the question

This essay engages well with the question. It has a good introduction defining a market, and uses diagrammatical analysis strongly to show why shifts in demand and supply will cause a change in the equilibrium. If this essay wanted to go further, it could look at why developing countries tend to export products such as coffee and what effect the decreasing value is having on them. Also, an exploration of FairTrade would be something else which could be insightful.

Level of analysis

The analysis in this essay is sound. The explanation of a market is good, with an awareness of supply and demand. If I were doing this essay, I would've mentioned that where supply and demand meet is the market equilibrium, determining the price and quantity. This would've added clarity. I like how the diagrams are shown with a shift. When drawing diagrams in economics, always think of a shift you can draw. By doing so, you are automatically showing understanding of the model. This essay is missing a simple few sentences detailing what the diagram is representing, however. I would've written something like "The shift from D1 to D2, and S1 to S2 has caused equilibrium price to decrease from P1 to P2 and quantity to increase from Q1 to Q2. I liked how they noted that the shift in supply is larger than the shift in demand, as this shows understanding that the effect depends upon the size of the changes. I see this essay was submitted in 2004, but if it was more recent, I would've looked at how global recession has caused a vast decrease in demand, yet supply is still rising.

Quality of writing

The essay is structured well, having a clear introduction and conclusion. I like how the introduction defines the terms in the question, showing a good foundation of knowledge. The conclusion draws upon the analysis and poses an evaluative statement, showing the ability to make a conclusion based on evidence. It's always good to see significance explored! Spelling, punctuation and grammar are strong.


Did you find this review helpful? Join our team of reviewers and help other students learn

Reviewed by groat 02/03/2012

Read less
Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Critically evaluate the perceived competitive starategies of the five clothing retail outlets, namely Edgars, ...

    Compared to 2002, retail sales are expected to deteriorate as a result of the tightening of the interest rate environment in 2002. As consumers are expected to curtail spending in order to absorb interest rate increases, retail sales are expected to be lower especially during the first part of 2003.

  2. Economics - Classical School of Thought, Keynesian School of Thought, Supply Side School of ...

    Trillions of dollars worth of transactions are conducted daily and free market forces and open flow of information control it all. What is the Supply Side view? The basic idea to supply economics is that by reducing tax rate we can increase economic growth.

  1. Goodrich-RabobankInterest Rate Swap:

    From exhibit 3 the following is also given: 4. Since Goodrich has BBB- credit rating it could raise capital at a fixed rate probably at 12.5% for 7-10 years. 5. Also, Rabobank could raise floating rate debt at LIBOR - 1/8% (LIBOR + 1/4% - 3/8%) since it is an AAA rated bank.

  2. GCSE Economics Coursework

    Overall converting the shop from a more conventional newsagent to more of a convenience store Q9. How many staff do you employ, what is their basic rate, what jobs do they do? I only employ 1 member of staff and their basic rate is 500pp/h.

  1. What were the main characteristics of Early Modern Europe?

    Witchcraft was an integral part of the mental climate of the 16th century, and included both the educated and the illiterate amongst its believers; examples of the former group included French political philosopher Jean Bodin (1530-96), and English jurist Sir Edward Coke (1533 - 92).

  2. Macroeconomic Objectives and their impact on Business Activity

    Cost-push inflation usually leads to a slower growth of company profits which can then feed through into business investment decisions. I think another relevant point to add that will affect ASDA is that if the UK has higher inflation than competitor countries then UK prices gradually rise above imported prices.

  1. Discuss the policy options the Australian Government can use to achieve external stability

    Most recently, the Howard Government implemented the taxation reform package, including the introduction of a 10% Goods and Services Tax (GST) and the abolition of the Whole sales Tax. Which was aimed at reducing the extent to which the tax system distorts the allocation of resources and imposes costs on Australia Businesses.

  2. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    Small apartments, large detached luxury homes, social housing & special needs properties. * Change to housing policy, more homes being built on brownfield and inner city sites * Continues to be firmly established in the lower to middle market * Southern divisions, retreat from high value London apartments & to

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work