Question

Which option best identifies why the sequential development of the boom-and-bust cycle in the Texas cotton
industry occurs? (1 point)

Cotton cycles are based on production. When production is low, the industry booms, but when it is high, the industry
busts.

Cotton cycles are based on supply and demand. When demand is high, the industry busts, but when it is low, the
industry booms.

Cotton cycles are based on the fashion industry. When more cotton clothes are produced, the industry booms, but whe
less are produced, it busts.

Cotton cycles are based on supply and demand. When demand is high, the industry booms, but when it is low, the
industry busts.

Answer 1

The fourth option. The boom-and-bust cycle is driven by supply and demand: high demand (and prices) causes a boom, which leads to overproduction later and a bust when supply outstrips demand.