After Adjusting for Inflation, a Comparison of the Price of Leg

question 84

Multiple Choice

After adjusting for inflation, a comparison of the price of leg warmers reveals that the price of leg warmers was significantly higher in the 1980s than it is today. Which of the following can explain this?

• A) Jeans become preferable to leg warmers, decreasing the demand for leg warmers.
• B) Leg warmers were fashionable in the 1980s (fact), and hence the high demand drove prices up in the 1980s.
• C) An increase in the price of cotton used to make leg warmers has led to a decrease in the price of leg warmers today.
• D) The expected increase in the price of leg warmers has led to a decrease in the price of leg warmers today.

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