Compare the supply and demand conditions in both locations. How many people live in each place? What is the weather like? What are the industries? How elastic will the price of hot coffee be in both locations? Be sure to consider the impact of climate.
How will consumers behave to maximize their utility? What is the average income in each location?
What are the costs of production both in the short run and long run for operating the pushcart?
Predict changes in the equilibrium price and quantity if there is a bad heat wave in Texas and if the price of coffee must be raised 10% to compensate for rising coffee bean prices.
Give a recommendation to Mr. Wilson of which city to place the coffee pushcart in. Also, explain why you choose this city and how it will impact the economy.