Wool and cotton can both be used to manufacture clothing in the garment industry. Suppose that bad weather destroys cotton crops at the same time that the price of wool increases significantly. What is likely to be the impact on the market for cotton? a decrease in both the equilibrium price and the quantity sold an increase in the equilibrium price and a decrease in the quantity sold an increase in both the equilibrium price and the quantity sold an uncertain effect on the equilibrium quantity but an increase in the equilibrium price

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Wool and cotton can both be used to manufacture clothing in the garment industry. Suppose that bad weather destroys
cotton crops at the same time that the price of wool increases significantly. What is likely to be the impact on the
market for cotton?
a decrease in both the equilibrium price and the quantity sold
an increase in the equilibrium price and a decrease in the quantity sold
an increase in both the equilibrium price and the quantity sold
an uncertain effect on the equilibrium quantity but an increase in the equilibrium price
Transcribed Image Text:Wool and cotton can both be used to manufacture clothing in the garment industry. Suppose that bad weather destroys cotton crops at the same time that the price of wool increases significantly. What is likely to be the impact on the market for cotton? a decrease in both the equilibrium price and the quantity sold an increase in the equilibrium price and a decrease in the quantity sold an increase in both the equilibrium price and the quantity sold an uncertain effect on the equilibrium quantity but an increase in the equilibrium price
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