Question

09 Question (2 points) See page 112 Please read the article below, and use the information in the article to answer this question. Coffee Cravers Ignoring Bean-Price Surge for Caffeine Fix by Marvin G. Perez and Lynn Doan Coffee Cravers Ignoring Bean-Price Surge for Caffeine Fix Marvin G. Perez and Lynn Doan March 13, 2014,5:17 PM EDT Doreen Cappelli is so hooked on her morning cappuccino that she says she'd pay a lot more to get it. "I don't drink wine and alcohol, Cappelli, 52, said after buying the $3.25 drink at Blue Bottle Coffee at San Francisco's Ferry Building, in the shadow of the Bay Bridge. "Coffee is one of my pleasures in life. would pay double." While prices probably won't go up that much just yet, pressure is growing on the $80 billion U.S.coffee industry as the cost of arabica beans used in high-end brews skyrockets. Futures in New York jumped 86 percent this year to $2.0595 a pound. By May, they may reach $3, the highest since 2011, said Judy Ganes-Chase, an industry consultant in Panama City, Panama, who has been analyzing the market for three decades. Arabica is off to its biggest rally to start a year in at least four decades after drought hurt crops in 1st attempt See Hint According to the article, major coffee sellers have ample stores of coffee beans on hand. This can be expected to make the price elasticity of the coffee relatively . .

Answer 1

This can be expected to make the price elasticity of supply of coffee relatively elastic in nature.

This is because as suppliers have ample store of coffee beans with them, they will be able to supply as much coffee as possible at any possible price. This makes the elasticity of supply of coffee relatively elastic in nature.