Two members of the Kenyan parliament from coffee-growing areas said that no firm should have a monopoly to market Kenyan coffee. The retail coffee company Tetu Coffee has sparked a storm in the industry by promising to earn the country Sh400 billion annually if given exclusive licenses to market Kenyan coffee. The members of parliament said the coffee bean farmers should be free to sell their beans to the highest bidder. Are the farmers in Kenya justified in being upset with having a single coffee buyer?
A. Maybe; the single buyer may reduce price but also will raise the quantity of coffee beans.
B. Yes; the single buyer will reduce both the quantity and price of coffee beans.
C. No; the single buyer will increase the price and quantity of coffee beans.
D. Maybe; the single buyer may reduce quantity but also raise price of coffee beans.
Answer: B
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