Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good)to increase?
A)An increase in consumer income.
B)A drought that sharply reduces cotton output.
C)A decrease in consumer income.
D)Unusually good weather that results in a bumper crop of cotton.

Question

Quizplus · Accepted Answer

An increase in consumer income, assuming cotton is a normal good, would lead to an increase in demand. This increased demand shifts the demand curve to the right, resulting in a higher equilibrium price and quantity.

Which of the Following Would Cause Both the Equilibrium Price