Question

Explain how changes in the following factors can change the demand for a competitive product like coffee beans:

i. Consumers’ preference
ii. Consumers’ expectation of future prices

Answer 1

Changes in consumers' preferences and expectations of future prices can impact the demand for coffee beans.

Step-by-step explanation:

Changes in consumers' preferences and expectations of future prices can impact the demand for coffee beans.

1. Consumers' preference: If consumers' preference for coffee increases, more people will be willing to buy coffee, resulting in an increase in demand. On the other hand, if consumers' preference for coffee decreases, demand will decrease.
2. Consumers' expectation of future prices: If consumers expect that coffee prices will increase in the future, they may buy more coffee now to avoid higher prices later, resulting in an increase in demand. Conversely, if consumers expect that coffee prices will decrease in the future, they may delay their purchases, resulting in a decrease in demand.