Question

Brewed coffee is one of the most popular drinks in the world and a big market in Singapore. In recent
years Singaporean consumers have become concerned that coffee farmers often receive very low
prices by large coffee companies buying their beans and selling them in international markets. For
this reason, fair trade coffee has reached supermarket shelves and coffee shops. Because producing
fair trade coffee includes providing extra income for the farmers, this product is more costly to make
than other coffee types of comparable quality. Using the demand-supply model, analyse this change
in consumer preferences. Examine the likely consequences in one or two markets of your choice.

Answer 1