Question 1Associations of tea producers in Asia and Africa have flagged concerns over the globalmismatch of demand and supply and called for an early restoration of equilibrium,according to a statement issued by a planters' body on Friday. In a meeting of thestakeholders of the global tea industry, recently held in Dubai, the associations alsoaddressed the issue of quality and long-term sustainability of the sector. Indian TeaAssociation (ITA) chairman Hemant Bangur said that the global tea industry is facing ademand-supply mismatch as production continues to outpace demand.Representatives of ITA, East African Trade Association (EATTA), independent teaproducers' body of Kenya, and tea associations of Malawi, Bangladesh and Ugandaattended the meeting. They voiced concern over stagnating consumption demand inEurope and Asia, the ITA said in a statement. Bangur said, "Africa with its increasedpopulation and rising income has the potential to become one of the largest markets forblack tea." According to the ITA statement, EATTA chairman Arthur Sewe said the teasector in East Africa is currently facing a decline in quality and issues related to climatechange , which require concerted efforts by all the stakeholders. During the meeting, theydeliberated on the impact of climate change, price stagnation, increasing input costs andchallenges relating to fair price discovery, it said. Malawi Tea Association chairmanSangwani Hara was quoted as saying that climate change is a big problem and must be  addressed to sustain the level of tea productivity.The industry is also facing a crisis in exports and falling value of the produce therebythreatening the livelihoods of millions, the ITA statement said. The stakeholders also feltthat the economic recession and geopolitical challenges due to the Russia-Ukraine conflictin the traditional bulk tea export markets had affected shipments.The Russian Federation is one of the largest importers of tea, particularly from India.https://www.business-standard.com/world-news/african-asian-tea-producers-flagconcerns-over-demand-supply-mismatch-124062100480_1.html      i. Illustrate and explain how the global tea market will maintain equilibrium overtime given the problem that will exist with current demand conditions.  ii. Is demand for tea price elastic or price inelastic? Explain your reasoning.  iii. Illustrate and explain the impact on equilibrium price and quantity in the Africantea market based on the following excerpt. Africa with its increased population andrising income has the potential to become one of the largest markets for black tea. EastAfrica is currently facing a decline in quality and issues related to climate change. Duringthe meeting stakeholders they deliberated on the impact of climate change and, increasing input costs. iv. With the impending crisis due to the Russia-Ukraine conflict explain what willhappen to (i) the market for coffee and (ii) the market for sugar.  v. Explain how revenue for tea producers will be impacted by the geopoliticalchallenges.

Question 1
Associations of tea producers in Asia and Africa have flagged concerns over the global
mismatch of demand and supply and called for an early restoration of equilibrium,
according to a statement issued by a planters' body on Friday. In a meeting of the
stakeholders of the global tea industry, recently held in Dubai, the associations also
addressed the issue of quality and long-term sustainability of the sector. Indian Tea
Association (ITA) chairman Hemant Bangur said that the global tea industry is facing a
demand-supply mismatch as production continues to outpace demand.
Representatives of ITA, East African Trade Association (EATTA), independent tea
producers' body of Kenya, and tea associations of Malawi, Bangladesh and Uganda
attended the meeting. They voiced concern over stagnating consumption demand in
Europe and Asia, the ITA said in a statement. Bangur said, "Africa with its increased
population and rising income has the potential to become one of the largest markets for
black tea." According to the ITA statement, EATTA chairman Arthur Sewe said the tea
sector in East Africa is currently facing a decline in quality and issues related to climate
change , which require concerted efforts by all the stakeholders. During the meeting, they
deliberated on the impact of climate change, price stagnation, increasing input costs and
challenges relating to fair price discovery, it said. Malawi Tea Association chairman
Sangwani Hara was quoted as saying that climate change is a big problem and must be 

addressed to sustain the level of tea productivity.
The industry is also facing a crisis in exports and falling value of the produce thereby
threatening the livelihoods of millions, the ITA statement said. The stakeholders also felt
that the economic recession and geopolitical challenges due to the Russia-Ukraine conflict
in the traditional bulk tea export markets had affected shipments.
The Russian Federation is one of the largest importers of tea, particularly from India.
https://www.business-standard.com/world-news/african-asian-tea-producers-flagconcerns-over-demand-supply-mismatch-124062100480_1.html   

i. Illustrate and explain how the global tea market will maintain equilibrium over
time given the problem that will exist with current demand conditions. 

ii. Is demand for tea price elastic or price inelastic? Explain your reasoning. 

iii. Illustrate and explain the impact on equilibrium price and quantity in the African
tea market based on the following excerpt. Africa with its increased population and
rising income has the potential to become one of the largest markets for black tea. East
Africa is currently facing a decline in quality and issues related to climate change. During
the meeting stakeholders they deliberated on the impact of climate change and, increasing input costs.

iv. With the impending crisis due to the Russia-Ukraine conflict explain what will
happen to (i) the market for coffee and (ii) the market for sugar. 

v. Explain how revenue for tea producers will be impacted by the geopolitical
challenges.