Supply Shock — Coffee Market
Source: Supply Shock in the Coffee Market · Microeconomics
Setup
Microeconomics- Qd = 100 − 2P Qs = 20 + 2P
- Initial: P* = 20, Q* = 60
Shock
Microeconomics- Qs' = −10 + 2P
- 100 − 2P = −10 + 2P ⇒ P*' = 27.5, Q*' = 45
Net effect
Microeconomics- Price: ↑ +37.5%
- Quantity: ↓ −25%
Flashcards
Microeconomics- Q: Demand vs quantity demanded? A shift moves the curve; movement along the curve changes only quantity demanded.

