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Coffee Economics at Milk o Coffee Roasters
- Samir, a cafe owner, explains how different coffee prices would impact his business decisions.
- At $3/cup, he couldn't operate; at $4, it'd be a struggle; at $5, current operations are maintained.
The Law of Supply
- Sellers tend to supply more when prices are higher, as exemplified by Samir's coffee shop.
- Higher prices incentivize longer hours and expansion due to increased profitability.
Applying Core Principles to Supply
- Use the marginal principle to determine if selling one more item is profitable.
- Consider the cost-benefit principle and opportunity cost when making supply decisions.