Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The price of specialty coffee will rise, and the quantity sold will increase.
B
The price of specialty coffee will fall, and the quantity sold will decrease.
C
The price of specialty coffee will remain the same, but the quantity sold will increase.
D
The price of specialty coffee will rise, but the quantity sold will remain the same.
Understanding the Answer
Let's break down why this is correct
Answer
In this situation, the coffee shop is seeing more customers wanting specialty coffee, which means the demand for it is increasing. However, because of the drought, there is a shortage of coffee beans, which makes it harder for the shop to supply enough specialty coffee to meet that demand. When demand goes up and supply goes down, the price of specialty coffee will likely increase. For example, if the coffee shop used to sell a specialty drink for $4, they might raise the price to $5 to balance the higher demand with the limited supply. In the short term, this means customers may have to pay more for specialty coffee, and some might even decide not to buy it at all if the price gets too high.
Detailed Explanation
When more people want specialty coffee, demand goes up. Other options are incorrect because Some might think that if supply is low, prices should drop; It's a mistake to think that prices stay the same when demand increases.
Key Concepts
Market Equilibrium
Demand and Supply Shifts
Price Elasticity
Topic
Analyzing Market Equilibrium Changes
Difficulty
medium level question
Cognitive Level
understand
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