Using the information in Question 3.6, determine how the equilibrium price and quantity of coffee beans change
Question:
Using the information in Question 3.6, determine how the equilibrium price and quantity of coffee beans change if the price of coffee cherries falls by 25\%.
Data From Section 3.6:-
Suppose the supply function for processing coffee beans from coffee cherries in Mexico is \(Q_{s}=3.15+0.1 p-0.5 p_{c}\) and the demand curve for coffee beans is \(Q_{d}=4.1-0.2 p\), where \(Q_{s}\) and \(Q_{d}\) are quantities of coffee beans in thousands of \(60-\mathrm{kg}\) bags, \(p\) is the price of coffee beans in millions of pesos per thousand \(60 \mathrm{~kg}\) bags, and \(p_{c}=0.8\) is the price of coffee cherries in millions of pesos per thousand \(60-\mathrm{kg}\) bags. What is the supply curve for coffee beans (that is, supply as a function of only the price of coffee beans)? Solve for the equilibrium price and quantity of coffee beans.
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