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 one year ago
In Problem Set 1, question 1d solutions do agree with me that the supply curve shifts to the right in the Chinese textile market. However, I do not agree that the equilibrium price will be higher. How can this be (considering the intersection point will always be lower in terms of yvalue)?
 one year ago
In Problem Set 1, question 1d solutions do agree with me that the supply curve shifts to the right in the Chinese textile market. However, I do not agree that the equilibrium price will be higher. How can this be (considering the intersection point will always be lower in terms of yvalue)?

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Dasa.Srujan
 one year ago
Best ResponseYou've already chosen the best response.0In 1d  Mexican Workers go on Strike > Cost of Production of textile in Mexico Increases > therefore, It's supply decreases (Shifts to the left) & price Increases. > Therefore, Mexican Textiles demand decreases. > as China Textiles Products are MT's substitutes, CT's demand Increases. (Shifts to right) > As a result, Equilibrium price of Chinese Textiles Increases.
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