change in supply but no change in demand?
Change in supply, with no change in demand: good weather in Brazil & Colombia is producing bumper crops
of coffee this year. Ceteris paribus, what effect will this have? Sketch a graph of this situation in the space below. Clearly indicate the initial & final position(s), and CLEARLY indicate the change, the initial equilibrium P & Q, and the final equilibrium P & Q. Explain briefly, but not less than 2 complete Englishsentences.
no graph required just explanation
When only the supply changes, and for a reason unrelated to the product or its substitutes, then you have a shift in the supply which is changing the quantity available at a give price point. When the supply curve shifts, in this case outward to the right, then the demand curve will intersect the supply curve at a higher quantity but a lower price. Again, don't move the demand curve, just shift the supply outward, it's easier to supply a higher quantity this year, due to a bumper crop based on weather
Test FIFA 98 Simulating Ability II
