In the past year, the price of dry-cleaning solvent doubled. More than 4,000 dry cleaners across the United States disappeared as budget-conscious consumers cut back. This year the price of hangers used by dry cleaners is expected to double.
a. Explain the effect of rising solvent prices on the market for dry cleaning.
b. Explain the effect of consumers becoming more budget conscious along with the rising price of solvent on the price of dry cleaning.
c. If the price of hangers does rise this year, do you expect additional dry cleaners to disappear? Explain why or why not.