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Letīs Do Some Economics

Coffee prices remain high

Read the article Coffee prices to remain high and then answer the questions below. You can either read the article in the window below or you can follow the previous link to read the article in a separate window.

Question 1

(a) Identify the main factors that have led to the increase in coffee prices. [2 marks]

(b) Using diagrams, as appropriate, illustrate the likely impact of the rise in the price of coffee beans on the market for instant coffee. [4 Marks]

(c) Discuss the extent to which coffee producers will be able to pass on the increase in the price of coffee beans to consumers. [8 Marks]