You didn't guess? It's the old rule of "supply and demand." At first b looks attractive but a. is more attractive, because those who used to prefer wool shirts may now switch because of the price difference.
Sra
Which of the following events would unambigously cause a decrease in the equilibrium price of cotton shirts?
a. an increase in the price of wool shirts and a decrease in the price of raw cotton
b. a decrease in the price of wool shirts and a decrease in the price of raw cotton.
c. an increase in the price of wool shirts and in increase in the price of raw cotton.
d. a decrease in the price of wool shirts and an increase in the price of raw cotton.
1 answer
1 answer