competition, markets, externalities, monopoly
Production in economic theory is often presented as a vertical supply chain.Inputs are transformed along the chain before being sold on to final buyers. Take the example of coffee in Figure 1. The processors purchase coffee berries from the farmers and remove the pulpy fruit to leave the beans. They then go through a roasting process before they sell the beans to the distributors. Cafés purchase the coffee beans from the distributors and sell the final cup of coffee to consumers.
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