Coffee and Tea
The question
Tea and coffee are substitutes for many consumers. The market for tea is initially in equilibrium when a poor coffee harvest causes the price of coffee to rise sharply. Show the effect of this change on the market for tea, assuming all else is held constant. Show the effect on the Supply and Demand graph.
Drag a curve, or use the arrow buttons. Want the free-play version with every control? Open this graph in the sandbox.
Coffee and Tea: the worked answer
On the Supply and Demand graph, Demand shifts right.
Why Demand shifts right
Coffee and tea are substitutes, so when coffee becomes more expensive, some consumers switch from coffee to tea. The price of a related good is a determinant of demand, so the demand for tea shifts to the right. The harvest failure affects coffee production, not tea production, so the supply curve for tea does not move.
What happens to the equilibrium
The equilibrium price of tea rises and the equilibrium quantity of tea increases.
The mistake students make on this one
The words "poor harvest" trigger many students to shift the supply of tea left. The failed harvest was a coffee harvest; tea growing conditions, tea input costs, and the number of tea sellers are all untouched, so nothing moves tea's supply curve.
On exam day
Underline the market named in the final sentence before drawing anything; a shock to a substitute reaches your graph only through buyers, so it moves demand, never supply.
How this is graded
The checker reads every curve's position before and after your answer. You are marked correct only when Demand shifts right and every other curve on the Supply and Demand graph stays where it started — the same standard an AP reader applies to a drawn graph: the right shift, and nothing extra. There is no AI involved; the rubric is the geometry.
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