coffee econ problem?
1: Suppose that the U.S. government reduces the tariff on imported coffee, and a reputable study is published indicating that coffee drinkers have lower rates of colon cancer. What will the combined impact be on the equilibrium price and quantity of coffee? Explain your reasoning and show graphically.
- OiyLv 610 months agoFavorite Answer
It's not all about demand. The tariff reduction will cause the demand to shift to the right. And the health concern data will also cause the same consequences. But the tariff reduction will also cause the domestic supply to shift to the left. This can cause the total supply to shift in the same direction. In sum, the price of coffee will increase, but the demand quantity cannot be determined.
- Anonymous10 months ago
Sounds like a win win for coffee........😃