Answer to Question #235198 in Microeconomics for ten

Question

According to the sources, people of our country started liking sweaters made out of wool that primarily comes from sheep. Analyze the following situations and examine the impact on demand and supply of both quantities and price of woolen sweaters.
Due to the complexity of raising sheep, the farmers have reduced the number of sheep by fifty percent. These farmers supply wool to the factories that manufacture sweaters.
Also, according to the sources, wool is an excellent temperature regulator. Therefore, it is proved to have good health benefits.
In the market, there is artificial yarn, used to manufacture switchers similar to wool, available at lower prices.
Of late, there are new and improved technologies are available to manufacture woolen sweaters with lesser quantities of raw material, leading to a reduced cost of manufacturing woolen sweaters.

Answer 1

The reduction of sheep supply will reduce the spply f sweater made of wool from sheep. This will redue quantity supplied and rise the prie of sweaters.

The good health benefits will increase the demand for sweaters made of wool and when the demand exceeds supply, the price will rise.

People will shift to artificial yarn sweaterbecause of their cheap price thereby reducind demand for sweater made of wool from sheep.

The reduced cost will increase the supply of wool sweaters.