Coffee: “Buy Low and Sell High”
Katrina Joy S. Leoncio
California InterContinental University

Abstract
As simple and delightful as it may sound, buy low and sell high has it’s own advantages and disadvantages. It may be beneficial to one but can cause damage to another. We have to take into consideration that to have a long, lasting and healthy economic condition, all parties involve in one process or cycle will benefit and provide for each other. Buy low? How low, is low? What would be the effect of purchasing low items to those who produce it? Sell high? How high? Can the consumer bear it?

Coffee: “Buy Low and Sell High” It is common to think that when price of a certain product drops, there will be a domino effect of conveniences and savings. As a consumer, seller of coffee products, or coffee farmer, can they sense this favorable situation? What causes the price to decrease? Who then will really benefit if the price of coffee beans drops? Let us consider first the game players in our commodity network that is vital and important to each other.

Producers or our coffee farmers first invest their time, money and effort to produce coffee beans which later on sold to restaurant owners and retailers. Consumers then purchase them for consumption. Each one is important for each survival and maintaining the balance for continuance is a must. The increase in supply or overproduction of coffee beans creates an excess supply causes equilibrium price to fall, thus a need to sell the products below production cost, which means no business to the coffee farmers.
Figure 1: Short-Run Analysis (Increase in Supply)

An increase in supply causes equilibrium price to fall and equilibrium quantity to rise. Consumers, on the other hand may not experience it at all especially those who prefer quality not only of the product but the quality of the place of