2 Between the start of 2006 and the start of 2007, the world price of tea rose from US
$2.00 to US $2.40 per kilogram. A key reason for this rise was an increase in
china's appetite for tea. Demand rose by 13% in 2006 and in 2007 chinese tea
consumption surpassed that of india for the first time.
A buyer for one of the major british tea selling firms said "we are at a point now
where supply and demand are so finely balanced that a drought in tea producing
countries would really affect prices". The british drink 165m cups of tea a day and
70m cups of coffee.
(a) calculate the percentage rise in the price of tea that occurred between the start
of 2006 and the start of 2008.
[2]
(b) using a diagram in each case, explain :
(i) why the price of tea rose between 2006 and 2008
(ii) the effect of a drought on the price of tea
[3]
[3]
(c) analyse whether coffee is a complement or substitute for tea.
[3]