Homework Help: Economics

Posted by Rod on Thursday, March 19, 2009 at 1:47am.

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.

Economics - SraJMcGin, Thursday, March 19, 2009 at 9:32am
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

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