That Coffee Taste Stale? It Could Be Nine Years Old
by: Julie Wernau
Jun 15, 2016
Click here to view the full article on WSJ.com
by: Julie Wernau
Jun 15, 2016
Click here to view the full article on WSJ.com
TOPICS: Supply and Demand
SUMMARY: The value of premium arabica beans in storage is deteriorating, becoming more attractive to certain commercial buyers that typically favor a lower quality variety.
CLASSROOM APPLICATION: Students can evaluate the effect of an increase in the price of robusta beans and an increase in the supply of arabica beans on the price of arabica beans.
QUESTIONS:
1. (Advanced) The value of three-year-old coffee gets cut by 35 cents a pound. Nine-year-old coffee is discounted by $1.55 a pound. Based on this data is the decline in the price of coffee a linear function of time?
2. (Introductory) What is the relationship between the average age of coffee beans sitting in warehouses and the premium of arabica beans over robusta beans?
3. (Advanced) What factors are causing the increase in the prices of robusta beans? What is the effect of an increase in the price of robusta beans on the demand for arabica beans?
1. (Advanced) The value of three-year-old coffee gets cut by 35 cents a pound. Nine-year-old coffee is discounted by $1.55 a pound. Based on this data is the decline in the price of coffee a linear function of time?
2. (Introductory) What is the relationship between the average age of coffee beans sitting in warehouses and the premium of arabica beans over robusta beans?
3. (Advanced) What factors are causing the increase in the prices of robusta beans? What is the effect of an increase in the price of robusta beans on the demand for arabica beans?
Reviewed By: James Dearden, Lehigh University
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