The following initial conditions exist in the "Coffee Market": -Initial Equilibrium Price (P): $ 40 per pound -Initial Equilibrium Quantity (Q): 100 pounds 

Question: Now suppose that a new technology is invented, which improves production of coffee and increases productivity in the industry. Simultaneously, a new report is released that states that coffee is bad for your health, which decreases consumption of coffee. Since we are not given any information about the relative size of the shifts, and thus have to assume the size of the shifts are equal, can we say with certainty what happened to the equilibrium quantity in the coffee market? Why or why not

Answer rating: 100% (QA)

No we cannot say with certainty what happened to the equilibrium quantity in the coffee market with ... View the full answer