A country that produces and consumes a large amount of coffee comparatively has just entered the world market. If the country becomes a net-exporter of coffee, we would expect to see:

Question

Quizplus · Accepted Answer

When a country that produces and consumes a large amount of coffee becomes a net exporter, it adds to the global supply of coffee. This increase in supply, assuming demand remains constant, would lead to a decrease in the world price of coffee due to the principles of supply and demand. Additionally, the increased availability of coffee on the world market would lead to an increase in the world quantity of coffee consumed.

A Country That Produces and Consumes a Large Amount of Coffee