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Introduction to Microeconomics - Essay Example

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Introduction to MICRO ECONOMICS : In recent times, the Brazilian coffee market is suffering form a microeconomic problem. There has been some serious shortage in supply of coffee in the coffee market of Brazil. As a result of this supply side shock in the coffee market, the price of coffee has increased significantly…
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Introduction to Microeconomics
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Introduction to Microeconomics

Download file to see previous pages... One of the vital factors that have caused such a situation to happen is the lower level of harvest in Mexico. Mexico has been one of the major exporters of coffee beans to Brazil. Thus, fall in the amount of harvest of coffee in Mexico resulted in a shortage of supply of coffee for the domestic consumption in Brazil. Another important factor behind the shortage of coffee supply was the sudden call out for a strike by the truck drivers of Columbia. This strike lasted for about two weeks thus affecting the supply, in consequence, the export of coffee to a large extent. Increased amount of exports of coffee beans abroad is another factor behind the shortage of domestic supply. There have been huge sales of coffee at abroad in this month of February; while on the other hand, the level of demand of coffee domestically is expected to increase further, and thus, will aggravate the problem of rising prices further. As the economy experiences a boom in the market, Brazil has toped to break all records as the export of coffee amounts to 2.7 millions of bags, equivalent to which, the consumption level of coffee rates to more than one millions of bags. The consumption of green and soluble coffee in Brazil is set to reach a limit of 6% in comparison to a record of 20.27 millions bags weighing sixty kilograms each. ...Download file to see next pagesRead More
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Introduction to Microeconomics
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