00:01
So here we're considering the market for coffee beans.
00:04
So the first thing i want to do is, as soon as i see that, without reading anything else about the question, is i want to draw a market for coffee beans, right? beans.
00:14
A market is a story about a demand and a supply curve.
00:17
Great.
00:17
We have a market for coffee beans.
00:20
We're now going to look at what we can do with this market for coffee beans.
00:24
And the first thing we see is that the market is changing, right? so there's two shocks, right? and the first shock is that the price of other beverages plus 30%.
00:42
So how does that affect the coffee market? well, i would say that makes coffee more appealing.
00:50
If everything else is getting more expensive, coffee is looking cheaper, right? these are what you might called substitutes, right? so this increases demand for coffee.
01:07
Other alternatives to coffee are getting expensive.
01:10
Coffee looks cheaper...