using supply demand diagram show the effects of the following events on the market for sweatshirts.a. a hurricane in south carolina damages the cotton crop.b. the price of lather jacket falls.c. all colleges requires morning exersice in appropiate attire.d. new knitting machines are invented.

Question
Asked Nov 8, 2019

using supply demand diagram show the effects of the following events on the market for sweatshirts.

a. a hurricane in south carolina damages the cotton crop.

b. the price of lather jacket falls.

c. all colleges requires morning exersice in appropiate attire.

d. new knitting machines are invented.

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Step 1

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The following supply and demand graphs show the effects of the following events on the market for sweatshirts:

The vertical axis represents the price of sweatshirts and horizontal axis represents the quantity demanded and supplied of sweatshirts

 

 

 

Step 2

a) Hurricane in South Carolina damages the cotton crop:

The hurricane damages the cotton crop resulting in the reduced supply of the input required that is cotton causing the price of the input to rise. When the input price rises, the supply curve of sweatshirts shifts leftwards with no change in demand curve. The leftward shift of the supply curve causes a decline in both the equilibrium quantity and equilibrium price of the sweatshirts.

Figure 1 illustrates the change in equilibrium position due to shift in the
supply curve.
S2
St
D
Quantity of Sweatshirts
Figure 1
Price of Sweatshirts
help_outline

Image Transcriptionclose

Figure 1 illustrates the change in equilibrium position due to shift in the supply curve. S2 St D Quantity of Sweatshirts Figure 1 Price of Sweatshirts

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Step 3

b. the price of leather jacket falls:

The price of leather jacket falls resulting in the reduced demand for sweatshirts as people tend to buy more of leather jackets. When the price of leather jacket falls, the demand curve of sweatshirts shifts leftwards with no change in supply curve. The leftward shift of the...

Figure 2 illustrates the change in equilibrium position due to shift in the
demand curve.
DI
D2
Quantity of Sweatshirts
Figure 2
Price of Sweatshirts
help_outline

Image Transcriptionclose

Figure 2 illustrates the change in equilibrium position due to shift in the demand curve. DI D2 Quantity of Sweatshirts Figure 2 Price of Sweatshirts

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