Week 5 Assignment – ECN501 Cotton Prices, Hand Sanitizer, and Valentine’s Day The “A” index ...

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Week 5 Assignment – ECN501 Cotton Prices, Hand Sanitizer, and Valentine’s Day The “A” index is a proxy for the world price of cotton.From January 2010 to October of 2010, the price reflected by the “A” index increased about 80%. Provide two separate explanations for this price increase using shifts in supply or demand. What one piece of information would allow you to decide which of the two is a better explanation? Due to the COVID19 outbreak, the demand for hand sanitizer tripled. Should Johnson & Johnson increase production of their Purell hand sanitizer? Should it invest in doubling production capacity? On Valentine’s Day, the price of roses increases by more than the price of greeting cards. Why? (Hint: Consider what makes roses and cards different and how that difference might affect supply’s responsiveness to price.)