4) From October 1994 to march 1995, the price of cotton increased from $0.65 to over $1 per pound, the highest level since civil war. According to business week, ‘supplies have dwindled because of poor crops in china, india, and Pakistan. At the same time, consumers, underred by rising costs, have pumped up demand for cotton-rich casual clothing, as well as home furnishings made from cotton.’ (a) was this price increase due to shift in the demand curve for cotton, a shift in the supply curve for cotton, or both. (b)Did this price increase affect the supply curve for clothing? If so, how?

Question

4)	From October 1994 to march 1995, the price of cotton increased from $0.65 to over $1 per pound, the highest level since civil war. According to business week, ‘supplies have dwindled because of poor crops in china, india, and Pakistan. At the same time, consumers, underred by rising costs, have pumped up demand for cotton-rich casual clothing, as well as home furnishings made from cotton.’ (a) was this price increase due to shift in the demand curve for cotton, a shift in the supply curve for cotton, or both. (b)Did this price increase affect the supply curve for clothing? If so, how?