What will happen to the equilibrium price and quantity of coffee if it is discovered to help prevent colds and, at the same time, Brazil and Vietnam emerge in the global market as massive producers of coffee?

Question

Quizplus · Accepted Answer

The discovery that coffee helps prevent colds increases demand, while the emergence of Brazil and Vietnam as massive producers increases supply. The increase in demand and supply will definitely increase the quantity, but the effect on price is uncertain as it depends on the relative magnitudes of the shifts in demand and supply.

What Will Happen to the Equilibrium Price and Quantity of Coffee