Apart of the high demand and cost for petroleum these days, coffee is appointed to be the second most traded product on global markets next to oil. Coffee is nature resources that is cultivated in more than 50 countries and provides living for more than 22 million farmers, altogether up to 100 million people are involved in the cultivating process, trading and retailing of the product globally.
The aim of this report is to answer the questions given in the study case regarding to the demand and supply for Starbucks coffee.
Starbuck Corporation is a company that purchase, sell and roast whole bean and rich-brewed coffees, espresso beverage, a selection of food items and coffee related a selection of quality teas, it is also the premier retailer, roaster and brand of speciality coffee in the world, Starbuck operates in 65 countries, according to the annual report of Starbuck, it has 10,713 stores in total located in North America, Latin America, Africa, Europe, Australia and Asia, it was found in …show more content…
(Kamila, 2015)
In this diagram the price has reduced due to the high quantity supplied, and the demand has shift to the left because the expectation of low price for coffee in the future by costumers.
8. The Demand for Starbucks Coffee is Price Elastic or Inelastic?
Price elasticity of demand measures the dimension to which the quantity of demand for a service or good changes when the price of service or good changes. In order to find the price elasticity of demand it has to be compared the change in quantity demanded with the change in price, (Lipsey and Chrystal, 2011).
The demand for Starbucks coffee is price elastic, because it is not categorised as a necessity good where the buyers have to buy regardless the price, Starbucks coffee is considerate as a luxury good and the demand for it will decrease if the prices rise due to the huge market of competitors selling the same products as Starbuck.
The aim of this report is to answer the questions given in the study case regarding to the demand and supply for Starbucks coffee.
Starbuck Corporation is a company that purchase, sell and roast whole bean and rich-brewed coffees, espresso beverage, a selection of food items and coffee related a selection of quality teas, it is also the premier retailer, roaster and brand of speciality coffee in the world, Starbuck operates in 65 countries, according to the annual report of Starbuck, it has 10,713 stores in total located in North America, Latin America, Africa, Europe, Australia and Asia, it was found in …show more content…
(Kamila, 2015)
In this diagram the price has reduced due to the high quantity supplied, and the demand has shift to the left because the expectation of low price for coffee in the future by costumers.
8. The Demand for Starbucks Coffee is Price Elastic or Inelastic?
Price elasticity of demand measures the dimension to which the quantity of demand for a service or good changes when the price of service or good changes. In order to find the price elasticity of demand it has to be compared the change in quantity demanded with the change in price, (Lipsey and Chrystal, 2011).
The demand for Starbucks coffee is price elastic, because it is not categorised as a necessity good where the buyers have to buy regardless the price, Starbucks coffee is considerate as a luxury good and the demand for it will decrease if the prices rise due to the huge market of competitors selling the same products as Starbuck.