Question

Suppose that the rise in the price of coffee beans resulted in a large decrease in the supply of Starbucks coffee while the lower prices by its competitor resulted in only a small decrease in demand. The net impact would be a:________.

Answer 1

A price that is higher and lower quantity of Starbucks coffee

Step-by-step explanation:

There was only a small decrease in demand for Starbucks coffee, and demand has been greatly decreased.

The demand for Starbucks coffee will remain high, supply will be limited and this will push the price high due to scarcity of the coffee.