Question

Draw supply and demand graphs that estimate what will happen to demand, supply, and the equilibrium price of coffee if these events occur: Widely reported medical studies suggest that coffee drinkers are less likely to develop certain diseases.

Answer 1

Answer:

Please find the required diagram in the attached image

Explanation:

Only a change in the price of a good leads to a movement along the demand curve of that good. Also, only a change in the price of the good would lead to an increase or decrease in the quantity demanded of that good.

Other factors other than the change in the price of the good would lead to a shift of the demand curve. Some of those factors include :

1. a change in consumers' expectation

2. a change in the taste of consumers

3. a change in income

As a result of the study, there would be an increase in the demand for coffee. This would shift the demand curve to the right. As a result, there would an increase in equilibrium price and quantity