What effect does technological advancement that doubles the efficiency of coffee harvesting have on the coffee market?

The correct answer indicates that while the impact on price is ambiguous, the quantity of coffee in the market will increase due to the technological advancement.

When a technology significantly improves the efficiency of coffee harvesting, the cost of production decreases. Producers can harvest more coffee at a lower cost, which typically leads to an increase in supply. The supply curve shifts to the right on the market graph, resulting in a greater quantity of coffee available at various price levels.

However, the effect on price can be ambiguous because it depends on the relative shifts of the supply and demand curves. If the increase in supply is substantial and demand remains constant, the increased quantity is likely to lead to a decrease in price. On the other hand, if demand for coffee also increases—perhaps due to lower prices making coffee more attractive to consumers—the effect on price could be mitigated. Hence, without specific information on how demand behaves in response to these changes, the movement in price is not determined definitively.

This is why the quantity of coffee will certainly increase with the advancement in technology, while the price could either decrease, stay the same, or even increase if demand shifts accordingly, resulting in an ambiguous price outcome.