Question

According to the supply and demand model, when the cotton gin was invented and if all else was held constant, we would expect the equilibrium price of cotton to _________ and the equilibrium quantity of cotton to

Answer 1

Answer:

decrease; increase

Explanation:

Because of the invention of the new technology which is the invention of the cotton gin, the production of the cotton boomed. This also means that the production of the cotton rise which as a result, would make the supplies higher and due to higher supplies, there would be reduction in the price of the cotton. Since, mentioned all factors remain constant which means demand remain constant, so

The equilibrium price of the cotton would be expected to decrease and the equilibrium quantity of cotton would be expected to increase.