Final answer:
The scenario of decreasing supply of cattle hides and leather goods, leading to increase in their prices is an application of the economic principles of supply and demand. Decrease in the supply of an item due to external factors can lead its price to rise. The price can further rise if demand also increases.
Step-by-step explanation:
From the information given, it can be understood that this is an instance of economic principles related to supply and demand. Like the case of leather and hides, similar principles apply: when the supply of a product decreases due to external factors (such as costs or production difficulties), the price typically rises as a result. For example, if the price of milk, vital to cheese production, rises leading to a supply decrease by 80 pounds at every price, this would cause the price of cheese to go up. The same applies in situations where changes in climate and weather affect agricultural production, resulting in supply decrease and consequent price increase. Finally, if studies indicate health benefits of a product like cheese, causing demand to increase by 20% at every price, this increased demand coupled with decreased supply can lead to further increased prices.
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