Which is the most likely effect upon the market for cotton of a significant improvement in the quality of synthetic textiles?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged.
B) A decrease in demand and hence a decrease in the price of cotton and an increase in the quantity exchanged.
C) A decrease in demand and hence an increase in the price of cotton and a decrease in the quantity exchanged.
D) A decrease in both demand and supply and hence a decline in the quantity exchanged but no predictable change in the price of cotton.
A
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The level of output produced when the labor market is in equilibrium is called
A) global production output. B) natural output. C) product market equilibrium output. D) potential output.
The government expenditure multiplier is used to determine the
A) amount aggregate supply is affected by a change in government expenditure. B) amount aggregate demand is affected by a change in government expenditure. C) extra scrutiny government action receives. D) amount private consumption is decreased by government expenditure. E) extent to which automatic stabilizers must be changed in order to avoid recessions.