Refer to the figure below, showing the market for coffee, to answer the following questions. Provide a detailed/summarized reasoning for a - f.
a) Find the equilibrium price and quantity pairs in the original setting.
b) What happens if the consumer reservation prices increase by $1.00?
c) What happens if there is a supply disruption in Colombia, a major coffee producer?
d) what happens if the government imposes a price ceiling of $1.00 on a cup of coffee?
e) What happens if both supply and demand shift? Provide an example of how such a development might happen.
f) Derive the functional forms for supply and demand lines for the original market conditions.
