Coffee Bean Market - Arabica by XueTing Lee https://padlet.com/lee_xueting/16A05GROUP3 en-us 2016-04-06 00:15:09 UTC 2023-03-19 17:49:26 UTC hello@padlet.com Chat Box lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256736 Mrs Ting: Oh..where are the people? Please get it done by Sat 10am.]]> 2016-04-04 06:39:46 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256736 Conclusion lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256737 Therefore, the two demand factors and the single supply factor all contribute to the fall in prices of coffee in Brazil. These demand factors are the recession that occured, as well as the availability of cheaper alternatives like sugar cane. The supply factor is that there was an influx of coffee beans but low demand for it, therefore resulting in companies lowering prices in order to increase the demand. This, however, only resulted in prices falling. Thus, these are the factors that have led to the fall in price of coffee beans in Brazil. ]]> 2016-04-04 06:38:57 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256737 Body: State the new (final) equilibrium lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256738 Therefore, as highlighted by diagram 1 above, the equilibrium has fallen and lowered, because of the downward pressure on the equilibrium price, which causes the price to decrease, until the new equilibrium price is reached, as seen in the diagram point E2. ]]> 2016-04-04 06:38:13 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256738 Body: Using the market adjustment process, explain how the shift(s) changes the equilibrium price and quantity (Explanation of diagram): lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256739 When the price decreases from P1 to P2, due to the leftward shift of both supply and demand curves. The supply curve shifts from S1 to S2, and the demand curve shifts from D1 to D2. This results in the equilibrium price lowering as well, to E2. The equilibrium price shows how the quantity demanded has fallen from Q1 to Q2, and it also shows how the equilibrium price falls from P1 to P2. 

]]> 2016-04-04 06:35:51 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256739 Body: Decide the direction and magnitude in which the curves shift lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256740 Firstly, both the supply and the demand curve shifts to the left. The demand curve shifts more to the left because of the fact that more demand factors are influencing the way the curves move. 

]]> 2016-04-04 06:34:27 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256740 Body: Identify and explain whether the factor/event shifts the demand or supply curve. (2 Demand + 1 Supply or 2 Supply + 1 Demand) lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256741 Demand factor 1: "The consumption in the developed world is flat and the recession has squeezed the profits of big food companies such as Nestle and Kraft", which highlights how the recession has lowered the income of consumers, and therefore consumers are no longer willing or able to buy coffee, further accentuated by how coffee is not a necessity. This therefore causes the demand curve to shift to the left. 

Demand factor 2: The availability of sugar cane, having a lower cost of production has caused farmers to grow sugar cane instead of coffee beans. This can be seen in "Planting other sorts of crops, the usual response to agricultural boom and bust, is not an option. Prices for sugar cane, a potential alternative, are low. Coffee is mainly grown on small plots by farmers who have known nothing else." Hence the demand for coffee beans have fallen, and the demand curve shifts to the left.

Supply factor 1: Oversupply of coffee beans as there is a new supplier in the market (Vietnam). This causes an influx in coffee beans in the market. This can be seen in Article 1 whereby it states that, "Strong demand for entry-level coffee-40% of the world's coffee crop is now robusta beans-has enabled Vietnam to go from almost nothing a decade ago to producing 25m bags today". Due to the influx of coffee beans, there is high supply but which cannot be met with the quantity demanded, which causes companies to lower the prices of the good in order to try to sell more (law of demand)]]> 2016-04-04 06:32:26 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256741 Body: State the initial equilibrium lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256742 The initial equilibrium is the point where the demand and supply curves intersect, where P1 and Q1 are equal. This means that the price that consumers are willing to pay and the quantity supplied are equal, therefore intersecting at point E1, where quantity is at Qe and price is at Pe.]]> 2016-04-04 06:31:44 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256742 Introduction lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256743 Explain market mechanism:
The process by which a market solves a problem allocating resources, especially that of deciding how much of a good or service should be produced, but other such problems as well. The market mechanism is an alternative, for example, to having such decisions made by government.

The market mechanism works through the interaction of the market forces of demand and supply to determine the equilibrium pice and output.

Define demand:
Demand is the amount of a good that consumers are able and willing to purchase in a given period of time at various prices.

Define supply:
The amount of good that producers are able and willing to offer for sale in a given period of time at various prices. 



]]> 2016-04-04 06:30:11 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256743 Welcome:) lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256744 Dear Students,

Welcome to Home-Based Learning 2016!

By now, you should have the list of the team members in your group. Each team will analyse 2 articles below to identify 3 evidence/information (2 Demand + 1 Supply or 2 Supply + 1 Demand factors)  to answer the following essay question:

a) With reference to the 2 news articles, explain the fall in prices of coffee beans in Brazil.

To discuss the answers with your group members, double click anywhere on the wall and a virtual "sticky note" will appear at the top. From, enter your name, then you can use the "sticky note" to "chat" with each other. 

For example, Miss Lee: I don't think that is a non-price factor that affects demand. Please remember to write your name before the statement :) 

Lastly, please identify these non-price determinants of demand & supply by quoting the relevant phrases from the article. 

For example, as stated in article 1, "the recession in Europe has hit demand". After quoting the evidence for the article please proceed to explain how this non-price factor affects demand or supply with economic rigour. 

I have provided some scaffolding statements to guide you in your essay development. Address each statement by writing the essay segment in the respective sticky note. Press the pencil button to write the respective essay segment.

]]> 2016-04-04 06:06:48 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256744 Topic: Demand, Supply & Market Equilibrium lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256745 Objective - Students will be able to identify and explain how the demand and supply factors affect the market for coffee beans.]]> 2016-04-04 06:04:45 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256745 Group name: lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256746 Please write out the names of the members in the group.
1. Alexandra
2. Tara
3. Nadya]]> 2016-04-04 06:03:43 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256746 With reference to the 2 news articles,  explain the fall in prices of coffee beans in Brazil. lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256747 2016-04-04 05:52:46 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256747 News Article 2 lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256748 2016-04-04 05:51:11 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256748 News Article 1 lee_xueting https://padlet.com/lee_xueting/16A05GROUP3/wish/104256749 2016-04-04 05:48:50 UTC https://padlet.com/lee_xueting/16A05GROUP3/wish/104256749 Discussion https://padlet.com/lee_xueting/16A05GROUP3/wish/107178764
Article 1
Nadya:
1. "A third of the world's coffee is grown in Brazil. Along with other countries that mainly cultivate the tastier and pricier arabica-bean variety" -Non-price supply factor (Number of sellers) 

2. 'Second, in places like China, Indonesia and Brazil itself, where coffee is an affordable luxury for the middle class, the market is growing by around 5% a year."-Luxury good

3. "But these drinkers are filling their pots with cheaper robusta beans-what Kona Haque of Macquarie dubs the "emerging-market coffee"." -Price elastic (Availability of substitutes)

4. "Strong demand for entry-level coffee-40% of the world's coffee crop is now robusta beans-has enabled Vietnam to go from almost nothing a decade ago to producing 25m bags today (see chart). " -Increase in the number of sellers (Supply Factor)

5. "Coffee is a labour-intensive crop; picking is still largely done by hand. Wages in Brazil and Colombia are rising fast and production costs are above prices." -Cost of Production (Supply factor)

6. "In response to the high prices of 2011 Brazilian farmers invested heavily in new acreage and improved yields with better husbandry and more fertiliser." - Input prices (supply factor)

7. "Demand for the fanciest arabica beans is healthy, as the global proliferation of coffee chains shows. Much of the finest coffee is grown in Central America in places such as Guatemala, Nicaragua and El Salvador. That region has been hit by leaf rust, a fungal disease, which could destroy 30% of the crop this year." -Decrease in supply

8. "Planting other sorts of crops, the usual response to agricultural boom and bust, is not an option. Prices for sugar cane, a potential alternative, are low. Coffee is mainly grown on small plots by farmers who have known nothing else." -Availability of substitutes = low demand for coffee beans

Article 2:  
Alexandra:

1. "Its appealing aroma and caffeinated kick mean that 83% of all American adults drink it, 63% of them on a daily basis, according to a survey from the National Coffee Association. " - Taste and preferences = high demand for coffee (demand factor)

2. "The reason is that production of coffee, and of cheaper robusta beans in particular, is booming. Vietnam has gone from growing almost nothing a decade ago to producing 25m bags of robusta beans a year today. The result is an oversupply of coffee." - Surplus, there are other cheaper substitutes to Arabica coffee (Supply factor) 

3. "First, consumption in the developed world—American, European and Japanese drinkers consume more than half the world's coffee—is flat, and the recession has squeezed the profits of big food companies such as Nestlé and Kraft." - Due to lower income of consumers as a result of recession, the number of consumers willing and able to buy coffee is lowered, as coffee is not a necessity. Price elastic (?)

4. "They have taken to blending cheaper robusta beans into their products to maintain their margins, causing the price of robusta to fall more slowly than that of arabica." - Big companies have turned to cheaper alternatives - Robusta over Arabica (supply factor)

5. "To make matters worse for arabica growers, falling prices have been accompanied by rising costs: coffee is still largely picked by hand, and wages are rising fast in Brazil and Colombia."
 - Due to rising cost of production and lower profit due to falling prices, farmers no longer have incentive to continue growing arabica.

6. Many Brazilian and Colombian farmers invested to boost production of arabica in response to the high prices of 2011, which has added to the oversupply and further depressed prices. - high supply, low demand, surplus of good - lower prices to try to sell more. 

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