Draw a demand-supply graph and label the aces with the price and quantity of khaki pants for each scenario below.
-A new technology reduces the time it takes to make a pair of khaki pants.
-The price of the cloth used to make khaki pants falls.
-The wage rate paid to garment workers increases.
-The price of jeans increases.
-People's incomes increase.
Address the following questions below for each graph scenario above.
-Does this event change demand, supply, both, or neither?
-Does this event increase or decrease demand and/or supply?
-How does this change in demand and/or supply affect the equilibrium prices and quantity in the market? In other words, do they increase or decrease?
-Find the new equilibrium and compare it with the original one in terms of equilibrium price and quantity. Do they increase or decrease?