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1.3 Price determination in a competitive market

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Question 3

The diagram below shows the market demand curve (DDD) and supply curve (SSS) for organic coffee beans, with the initial equilibrium price at Pe P_e\,Pe​ and quantity at QeQ_eQe​.

Demand and Supply Diagram

Which one of the following changes would result in a higher equilibrium price and a lower equilibrium quantity of organic coffee beans?

A significant decrease in the price of non-organic coffee beans, which are considered a close substitute

A major crop disease outbreak that destroys a significant portion of organic coffee bean crops

An international health report promoting the long-term cognitive benefits of drinking organic coffee

The introduction of a more efficient mechanical harvester that reduces harvesting costs for organic farmers

1.3 Price determination in a competitive market Questions

  1. A Level
  2. /Economics
  3. /1.3 Price determination in a competitive market