Thus, one consequence of excess demand is that individual suppliers can charge more for ice cream without selling less of it. You are to decide what effect each of the events described below will have on the equilibrium price of cotton paid to U.S. growers by raw cotton buyers, and on the quantity exchanged. Draw on the graph to the left of the question to illustrate your answer. Wages of cotton field hands increase substantially and are expected to remain high. An increase in the price of resources used to produce cotton will raise the cost of offering each bale for sale.
Shepherds tend sheep from which wool is obtained.
Wool and cotton are substitutes . All rights reserved.