Final answer:
Coffee price fluctuation is influenced by global supply and demand, with historical prices ranging from 50 cents to over $2 per pound. This volatility impacts the income of millions of families involved in coffee production and results in different coffee shop prices.
Step-by-step explanation:
The subject of this question revolves around the fluctuation of coffee prices in the global market, which is influenced by various factors, including the supply and demand from the top coffee-exporting nations. Coffee prices are known to vary significantly over time, as demonstrated by the historical data indicating that coffee was as low as 50 cents per pound in 1993 and reached a high of $2 per pound in 1995. These fluctuations affect not only the global economy but also the local economies of coffee shops, where we see a difference in the mean price of a large cup of coffee between small town and big city coffee shops.
Several factors contribute to these price changes, such as weather conditions affecting coffee crops, changes in supply and demand, political stability in exporting countries, and global economic trends. These factors together create a volatile coffee market where the world price of coffee bounces up and down, impacting 20 million families whose main source of income is selling coffee beans. Local coffee shops must adjust their pricing based on these global price changes and their operational costs, leading to varying coffee prices for consumers in different locations.