Coffee In The Middle East

Factors affecting demands for coffee are: Price the Middle East is currently a multi-million dollar business that has not exposed to any quiet period in its annual expansion , there is an inverse relationship between coffee price and quantity demanded as price increase, quantity demanded fall due to decrease in the satisfaction level of consumers, UAE increasing their consumptions by 85 percent, Morocco and Saudi Arabia by more than 30 percent, and Egypt by 20 percent. So there is a “strong demand for both at-home and busy coffee drinking opportunity(1) demand for coffee is also affect by price changes of the correlated commodities which are of two types: substitute goods such as tea used in place of coffee, and increase in the price

If coffee consumption by the consumers increase , then demand will increase and vice -versa. in the Middle East the consumption and availability of the coffee shop that attracts , consumers of different ages, genders, students, and other young people of 26 years old whom are a key demographics for coffee chains and revenues , Saudi Arabia the biggest market in the Gulf region, have 15 million consumers below the age of 30, whereas Egypt is domicile to over 45 million consumers under the age of 30 years old (4).Demand of coffee is affecting by expectations of future price : If there is an expectations to increase coffee price in the near future, then consumers will buy more than usual and this leading to increase in the present demand as there is a direct relations between them (5). Using demand curve which shows the quantities of coffee that buyer will be ready and have the ability to buy at every price during a period , the supply curve which shows the quantities that seller will sale at every price in the same periods , putting the two curves together, we should have the ability to find a price at which the quantity buyers are willing to purchase equal to the quantity sellers offer for sale, equilibrium price is the price at which the demanded quantity equals to the supplied. The equilibrium quantity is the quantity demanded and supplied

To face this shortage, sellers are expected to raise their prices, and there will be increasing in the supplied quantities (but not a change in supply) shifts the supply curve to the right and a decrease in the demanded quantities (but not a change in demand) will Shifts the demand curve to the left, the equilibrium price is achieved ,Costa using a lot of techniques to build its products such as products physical aspects (advertisement phrases ) , shop location , products intangible aspects (reputation) and consumers perception this known as differentiated products when competitors enter into the coffee market the demand curve and marginal revenue curve shift to the left and the demanded quantities at a certain price will decline, leading to a profit-maximizing quantities and marginal revenue will then equal marginal cost at a lower quantity. Graph (a) the Price and Average Cost at coffee market , price intersect marginal cost above the average cost curve. As the price is greater than average cost, Costa gain a profit e.g. analysis if the price of espresso is $5 Costa produce output for a profit- maximizition when Price= MR = MC at a quantity of 90 in which that total