Friday, February 3, 2012

Cotton Prices

The price of cotton was increasing in 2011 and the reason was "supply and demand". With a decline in the demand for cotton in prior years due to the economic recession, firms were producing less cotton. As the economy started to come out of the recession, demand for cotton started to rise, but the supply of cotton did not respond as quickly due to floods in Pakistan. Hence the demand for cotton was increasing faster than the supply of cotton, which increased the price of cotton.

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