S&D_past_midterm - effect if any will the technological...

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In the following question you are asked to analyze the apparel market using the supply and demand model. Using graphs be careful to label everything and to explain your answer clearly. Remember that credit depends on your explanation as much as on your answer. a. Suppose that there has been a technological improvement in the manufacturing of shirts. Using the S&D graph explain how this will affect the equilibrium price and quantity of shirts. Will revenues from shirts increase or decrease? b. Suppose that there has been no change in the technology of manufacturing jeans. What
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Unformatted text preview: effect, if any, will the technological improvement in shirts have on the market of jeans? Specifically, using the S&D graph, explain how this will affect the equilibrium price and quantity of jeans. Will revenues from jeans increase or decrease? c. Suppose now that there was no technological change in the manufacturing of shirts. A market analyst has found that the price of jeans has gone up. Given that incomes have gone down she argues that jeans must be an inferior good. Is she correct?...
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