Case study: What? High prices for tea and coffee? 

Read the following article and answer the questions below.

Coffee price rise its bean a long time coming

The days of the $3 coffee may be numbered as caf owners come under pressure to pass rising costs on to legions of coffee drinkers. In addition to increases in rents, transport costs and milk prices, cafes were within weeks of being hit with higher prices for coffee beans, Australian Coffee Traders Association vice-chairman Andrew Mackay warned yesterday : Coffees been really, really strong but, historically speaking, were seeing prices at almost 10-year highs in the Arabica market and the same with Robusta The market price for Arabica beans had gone from roughly $US1.30 a pound to $US1.58 a pound over the past three to four weeks, Mr Mackay said Tea, coffee and food drinks rose 4.5 per cent in the three months to December, according to the latest figures, and coffee drinkers thinking of switching to tea will find no respite as tea prices are at record heights. The managing director of tea retailer T2 Maryanne Shearer saidThe demand for tea has increased dramatically, initially as a result of the wellbeing focus on peoples lifestyles. Its very much a global thing.

Source: Midalia, A. 2008. Coffee price rise its bean a long time coming. The Australian Financial Review, Thursday 21 February.

a) Draw a diagram to show the change in the coffee market that has resulted in higher prices for coffee. 

b) Draw a diagram to show the change in the tea market that has resulted in higher prices for tea.

c) Explain the non-price determinants involved in the change in each market. 

d) Why would the writer suggest coffee drinkers might be thinking of switching to tea.