Please write a synopsis of the supply and demand elasticities of coffee.

Let us understand the elasticity of the automobiles with the help of the relationship between the consumer’s total expense and the price of the product:

What does Elasticity mean? Ineconomic terms, elasticity generally the responsive nature of demand and supply of a product or a service, in relation to increase in decrease of the price. In other terms, elasticity measures the change in the percentage of the quantity of the product due to the change in the percentage of the price of the product. Additionally, to calculate total expenditure, the formula used is Price of the product multiplied by the quantity of the product. Hence, naturally, changes in total expenditure can be due to any change in the price or the quantity or both. For instance, the lower the price, the lower the total expenditure and higher the price, higher the total expenditure.

Now to make things simpler for you to understand, let us understand this step by step. As all of us are very aware that coffee is a staple drink in almost all the households of America due to it’s heavy daily consumption. There are various people, who are even addicted to coffee and cannot start their day without a cup of coffee. Hence it can be safely said that coffee is a necessity in the American households and is now a necessary product. As a result, we can say that the price elasticity of the demand of coffee will be very low in America. Just to understand price elasticity of demand in brief:This concept rightly fits here, as this concept states that when a product is a necessity it generally does not get affected with the change in demand. In other words, even if the prices of the necessity good increase, it’s demand will still stay constant as there is no room to reduce the usage of a necessity product.  We can now term coffee as a necessity good for the Americans now. Any change in price of coffee, would not make a huge change in the demand of coffee.Also it is to be noted that coffee takes a huge amount to grow, sometimes months and even years, even this case does not affect the demand of coffee. Hence, it is now safe to conclude that coffee as a product has less elasticity of supply as it’s supply generally remains constant no matter what the price is.
However, elasticity may differ from brand to brand, as no brand of coffee has a monopoly in the market. For example the demand of various brands of coffee depends on the following factors, the area where it is manufactures, the health benefits, the price of the coffee, the ingredients used etc. Now elasticity of supply of coffee in terms of various coffee brands may keep changing and does not remain constant.  For example there can be a particular type of brand of coffee which is liked by a majority of chunk of people, however if that brand of coffee increases it’s price, then the brand will be at a loss as due to a variety of coffee brands in the market, the customers will have a wide variety to choose from. Hence in case of that brand, an increase in the price of the coffee will result in a drastic fall in the supply of coffee, as customers will replace that brand of coffee with some other brand. This will go on till the time customers are getting a variety of brands in coffee.