WSJ Coffee Substitute Prices

The Wall Street Journal  has an article about how the price of the one kind of coffee bean, robusta coffee beans, is increasing, and the price of another, the arabica coffee bean, is decreasing. As of right now the price of the robusta coffee been is less than the price of the arabica coffee bean. This means that the two prices of the coffee beans are growing closer, and therefore many producers of coffee and investors are closely watching and waiting for the prices to potentially be equal or pass each other. In that case, people will switch over to the arabica, as it would be the cheap of the two coffee beans.  This example shows the changing prices of substitutes (as we have talked about in class) and how it affects the supply and demand curves of each kind of coffee bean.

1 Comment »

  1. Sam Krauskopf Said,

    October 4, 2016 @ 1:21 am

    This article is a great example of how substitutes can very in price and quality. coffee is a great example of many different substitutes as not only are there many different bean types but also alternative caffeinated and energy drinks.

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