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Q: What was most likely the result of increased demand for cotton?
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Why do higher prices result in higher profits and not greater supplies?

In the short run higher prices result in higher profits. If demand increases for a crop or a manufactured product, it takes time for an increased demand to be met. It takes 200 days for a cotton seed to produce a cotton bush with ripe cotton ready to be picked. It takes time to take the cotton to the gin and have the seeds removed. Then the cotton must be turned into thread, woven into material, cut according to a pattern, and then the finished material made ready for sale. For any product, lead time exists. Only as a product becomes a commodity does higher prices lead to greater supplies. Then producers know there will continue to be a market for the product and the long lead time will not be wasted.


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What problem would this create for southern cotton growers?

The automation of cotton picking would likely reduce the demand for labor in the industry, potentially leading to unemployment or loss of income for southern cotton growers who rely on manual labor. It could also result in reduced competitiveness if other regions adopt automation more quickly. Additionally, the upfront cost of investing in automated machinery could be a barrier for smaller-scale cotton growers.