2) Use the following scenario to answer the following two questions: Suppose that the Canadian textile industry is perfectly competitive. In the long run, the equilibrium price is $30. a) Suppose a new marketing campaign by the Canadian Textile Association is effective at encouraging consumers to buy Canadian-made clothing. Starting from a long-run equilibrium, use graphs for the entire market and for an individual producer to briefly explain how this campaign will affect individual firms and the market in both the short-run and the long-run. Full marks require both the correct use of both graphs and the correct explanation.

b) Suppose the United Food and Commercial Workers (UFCW) union, succeeds at negotiating higher wages for workers in the Canadian textile industry. Starting from a long-run equilibrium, use graphs for the entire market and for an individual producer to briefly explain how this campaign will affect individual firms in both the short-run and the long-run. Full marks require both the correct use of both graphs and the correct explanation. (This question is independent of part a) above. Do not try to show/discuss them together).