Question

For each of the following, state whether there is a resulting change in demand or change in quantity demanded, then state if price is higher or lower, and the quantity sold greater or less relative to what it was before the change.

a. In the market for coffee beans grown by Brazilian farmers, what happens after farmers in Vietnam switch their rubber plant crops to coffee beans?

b. In the market for Netflix subscriptions, what happens after Netflix decides to raise its subscription prices?

c. In the market for beef (to eat), what happens after a large percentage of people commit to being vegetarians?

d. In the market for music CDs, what happens after the introduction of subscription streaming music services like Spotify and Apple Music?

e. In the market for oranges grown in Florida, what happens after a major fire in California destroys a large percentage of its navel orange crop?

f. In the market for navel oranges grown in California, what happens after a major fire in that state destroys a large percentage of its navel orange crop?

Answer 1

(a) If Vietnamese farmers switch to coffee production, demand for Brazilian coffee decreases. Demand curve shifts to left, decreasing price and decreasing quantity.

(b) Increase in subscription price decrease quantity demanded, causing an upward movement along demand curve. Price will increase and quantity will decrease.

(c) Increase in number of vegetarians will decrease the demand for beef. Demand curve shifts to left, decreasing price and decreasing quantity.

(d) Music streaming services will decrease the demand for music CD. Demand curve shifts to left, decreasing price and decreasing quantity.

(e) Destruction of Californian orange crop will increase the demand for Florida orange. Demand curve shifts to right, increasing price and increasing quantity.

(f) Destruction of Californian orange crop will decrease its supply, not demand. Supply curve will shift to left, increasing price and decreasing quantity.