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Essay / Research Paper Abstract
An 11 page paper discussing the decline of the global coffee industry during the decade of the 1990s. As the number of coffee producers increased when Vietnam entered the global coffee market, supply increased dramatically to drive down prices to the lowest seen in 30 years. Though the coffee grown in Vietnam was not the most desirable available, it was used to blend with higher quality coffee, driving down the price of the higher quality variety as well. This is an economic paper discussing perfect competition and the effect of cartel involvement on supply and demand. Includes 2 charts. Bibliography lists 12 sources.
Page Count:
11 pages (~225 words per page)
File: CC6_KSeconCoffee.rtf
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Unformatted sample text from the term paper:
the number of coffee producers increased when Vietnam entered the global coffee market, supply increased dramatically to drive down prices to the lowest seen in 30 years. Though the
coffee grown in Vietnam was not the most desirable available, it was used to blend with higher quality coffee, driving down the price of the higher quality variety as well.
1. Use the model of perfect competition at the level of the firm and market to examine changes in the world supply and price of coffee from the early 1990s.
Baumol and Blinder (n.d.) define perfect competition as the equilibrium point occurring "in an industry when that industry is made up of
many small firms producing homogeneous products, when information is perfect, and when there is no impediment to the entry or exit of firms."
Ruby (2003) expands on this definition in offering, "Perfect Competition defines one end of the competitive spectrum with each firm behaving as a price taker in their respective industry."
Combining the two definitions creates a scenario in which there are a large number of firms, products are highly similar and perfect market information is available. Figure 1 illustrates
the industry in perfect competition. Figure 1. Industry in Perfect Competition The
ascending line is that of supply in the industry; the descending line (left to right) is that of demand. When supply is low, demand is high; when demand is
low, supply is high. In the case of the coffee industry, there are other considerations as well, including weather. In past years, an inopportune frost or freeze could
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