More than ever manufacturing is backbone of every country. In particular, textile industry plays a major role behind countries economical activities. As the world is becoming a global village it is becoming highly difficult for the western countries where the standard of living is high to meet the manufacturing cost of the eastern country such as South Asia or far eastern countries therefore western countries such as EU members have started to buy the finished products from far eastern countries instead of buying the raw materials. On 1st of January 2005 the quotas from the intentional trading were lifted which gave far eastern countries to trade freely and have stronger relationships with EU retailers. Further on, on 10 of June EU and China agreed to a deal that will manage the growth of cheap Chinese textile imports to EU till 2008 however these restrictions have left millions of products stranded on the ports of European countries (www.asianews.it).
price of market balance
English: graph showing Consumer Surplus
european union starsIn this essay I will be focusing on how the effect of cheap imports from china will affect various markets in EU. In order to do so I will be looking at the main concepts of micro-economics and how they are effected with in the market also I will be looking at the macro-economic factor such as unemployment that will be affected by so called the 'Bra War'
Demand is known as the desire to purchase the good or service, supported by the fact of having ability and willingness to pay for the product and this is derived by two factors that are income and changes in prices. In this essay I will be outlining the price factor.
The graph shown in the figure 1 (shown below) identifies the demand curve by showing that if customers start consuming up to a...