Step 1: Analyze the effect of each scenario on the price of khaki pants.
Consider the following scenarios. Think about how each scenario would affect the price of khaki pants.
1. A new technology reduces the time it takes to make a pair of khaki pants.
2. The price of the cloth used to make khaki pants falls.
3. The wage rate paid to garment workers increases.
4. The price of jeans increases.
5. People's incomes increase.
Step 2: Draw a demand-supply graph and label the axes with the price and quantity of khaki pants.
Create one graph that shows each of the demand-supply curves for the five scenarios listed in Step 1.
Step 3 : Address the following statements related to the graph.
1. Below the graph, address the following questions relating to your graph:
2. Does each event change demand, supply, both, or neither? Explain your choice.
3. Does the event increase or decrease demand and/or supply? Explain your answer.
4. How does this change in demand and/or supply affect the equilibrium prices and quantity within the market?
5. Compare the new demand curve or supply curve by drawing it on the same graph.
Find the new equilibrium and compare it with the original one in terms of equilibrium price and quantity and explain your findings.