Suppose bad weather adversely affects coffee plantations in Brazil. If the demand for coffee increases during such a shortage, which of the following is likely to be true?

Question

Quizplus · Accepted Answer

The adverse weather in Brazil, a major coffee producer, would reduce the supply of coffee, shifting the supply curve to the left. If demand increases simultaneously, the equilibrium quantity of coffee will decrease because the reduced supply cannot meet the higher demand, leading to a higher equilibrium price but lower quantity.

Suppose Bad Weather Adversely Affects Coffee Plantations in Brazil