Consider the world market for a particular quality of coffee beans. The following table shows the demand and supply schedules for this market.

a. Plot the demand and supply schedules on a diagram.
b. Identify the amount of excess demand or supply associated with each price.
c. Identify the equilibrium price in this market.
d. Suppose that a collection of national governments were somehow able to set a minimum price for coffee equal to $3.90 per kilogram. Explain the outcome in the world coffee market.

Transcribed Image Text:

Quantity Demanded Quantity Supplied Price (per kilogram) $2.00 $2.40 $3.10 3.50 $3.90 $4.30 (millions of kilograms per year) 10 12 13.S 19.5 28 26 19.5 17 14.5 23.5