Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 6, Problem 7DQ
To determine
Impact of inventories on demand, output and production.
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- For the following exercise, refer to the graph of the coffee market described on the right portion of your screen. Event: The future price of coffee is expected to escalate. In the graph of the coffee market (using the line drawing tool) show how the demand curve will change as a result of the event described above. Label the new demand curve 'D₂'. Note: if you are not prompted for a label, then you have used the wrong drawing tool. For the following exercise, refer to the graph of the coffee market described on the right portion of your screen. Event: Reports suggest coffee causes insomnia. In the graph of the coffee market (using the line drawing tool) show how the demand curve will change as a result of the event described above. Label the new demand curve 'D₂'- Note: if you are not prompted for a label, then you have used the wrong drawing tool. ← Price per kg Price per kg Quantity of coffee per week (millions of kgs) D₁ Quantity of coffee per week (millions of kgs)arrow_forwardIn January 2020, Starbucks raised their beverage prices by an average of 1% across the U.S, a move that represented the company’s first significant price increase in 18 months. I failed to notice because the price change didn’t affect grande or venti (medium and large) brewed coffees and I don’t mess with smaller sizes, but anyone who purchases tall size (small) brews saw as much as a 10 cent increase. The company’s third quarter revenue rose 25% to $417.8 million from $333.1 million a year earlier, and green coffee prices have plummeted, so what gives? Starbucks claims the price increase is due to rising labor and non-coffee commodity costs, but with the significantly lower coffee costs already improving their profit margins, it seems unlikely this justification is the true reason for the hike in prices. In addition, the price hike was applied to less than a third of their beverages and only targets certain regions. Implementing such a specific and minor price increase when the bottom…arrow_forwardIn January 2020, Starbucks raised their beverage prices by an average of 1% across the U.S, a move that represented the company’s first significant price increase in 18 months. I failed to notice because the price change didn’t affect grande or venti (medium and large) brewed coffees and I don’t mess with smaller sizes, but anyone who purchases tall size (small) brews saw as much as a 10 cent increase. The company’s third quarter revenue rose 25% to $417.8 million from $333.1 million a year earlier, and green coffee prices have plummeted, so what gives? Starbucks claims the price increase is due to rising labor and non-coffee commodity costs, but with the significantly lower coffee costs already improving their profit margins, it seems unlikely this justification is the true reason for the hike in prices. In addition, the price hike was applied to less than a third of their beverages and only targets certain regions. Implementing such a specific and minor price increase when the bottom…arrow_forward
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- In January 2020, Starbucks raised their beverage prices by an average of 1% across the U.S, a move that represented the company’s first significant price increase in 18 months. I failed to notice because the price change didn’t affect grande or venti (medium and large) brewed coffees and I don’t mess with smaller sizes, but anyone who purchases tall size (small) brews saw as much as a 10 cent increase. The company’s third quarter revenue rose 25% to $417.8 million from $333.1 million a year earlier, and green coffee prices have plummeted, so what gives? Starbucks claims the price increase is due to rising labor and non-coffee commodity costs, but with the significantly lower coffee costs already improving their profit margins, it seems unlikely this justification is the true reason for the hike in prices. In addition, the price hike was applied to less than a third of their beverages and only targets certain regions. Implementing such a specific and minor price increase when the bottom…arrow_forwardIn January 2020, Starbucks raised their beverage prices by an average of 1% across the U.S, a move that represented the company’s first significant price increase in 18 months. I failed to notice because the price change didn’t affect grande or venti (medium and large) brewed coffees and I don’t mess with smaller sizes, but anyone who purchases tall size (small) brews saw as much as a 10 cent increase. The company’s third quarter revenue rose 25% to $417.8 million from $333.1 million a year earlier, and green coffee prices have plummeted, so what gives? Starbucks claims the price increase is due to rising labor and non-coffee commodity costs, but with the significantly lower coffee costs already improving their profit margins, it seems unlikely this justification is the true reason for the hike in prices. In addition, the price hike was applied to less than a third of their beverages and only targets certain regions. Implementing such a specific and minor price increase when the bottom…arrow_forwardMacroeconomics – Week #2 Assignment Demand and Supply Exercises Directions: Fill in the boxes (QD, QS, D, S, P, Q) in the next three demand and supply exercises. Based upon the event, what can we expect to occur for the market? Use a “0” (zero) if nothing will occur for that particular variable, a “+” (plus) if an increase, or a “-“ (negative) if a reduction. QD stands for Quantity Demanded, QS for Quantity Supplied, D for Demand, S for Supply, P for Price, and Q for Quantity.arrow_forward
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