How Shifts in Supply and Demand Influence Price, Quantity, and Market Equilibrium Essay

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Economics -- Supply and Demand of Coffee Beans

In many respects, coffee (in its final forms) is a consumer product whose profitable sale and value fluctuate in accordance with traditional economic principles of supply and demand very much like other consumable consumer products. In other respects, coffee is insulated from some of the factors that typically dictate the relative price of other consumer products. Specifically, coffee is a product whose demand remains relatively constant, or in economic terms, the market for coffee is inelastic (Mankiw, 2008) because people generally continue to purchase coffee in the same quantities regardless of increases in its price.

The Influences on Consumer Habits and Demand for Coffee

Generally, consumer consumption of coffee remains quite constant in terms of their style of consumption because the product is almost always part of very habitual routines. People drink approximately the same amount of coffee at approximately the same times of day and in approximately the same serving-sizes or quantities year-round and they ordinarily maintain those habitual behaviors for many year and even over the course of many decades.

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Likewise, whereas many other consumer goods and consumables are subject to the influence of style and social trends, coffee consumption habits are much less susceptible to those kinds of influences on consumers (Goldstein, 2010).

Certainly, economic factors do influence consumer spending habits as pertains to coffee; however, the nature of the fluctuations involved affect the overall demand for coffee beans much less than they affect the manner or the form in which consumers choose to consume it. Whereas consumers typically cut back their consumption of other types of consumer products in times of economic difficulty, coffee consumption is relatively immune from those dynamics for two specific reasons. First, most generally, precisely because coffee is consumed in such a habitual manner and because it is associated….....

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