What could cause both equilibrium price and quantity of cotton to rise?

An increase in consumer income typically leads to a higher demand for normal goods, which includes cotton. When consumer incomes rise, people generally have more disposable income to spend, which increases their overall purchasing power. As demand for cotton rises due to consumers being willing to buy more at any given price, the demand curve shifts to the right.

As the demand curve shifts rightward, with supply held constant, both the equilibrium price and quantity of cotton will rise. Producers respond to the higher demand by increasing the quantity supplied to the market, which leads to a higher equilibrium quantity as well. Simultaneously, the increase in demand puts upward pressure on the price, resulting in a higher equilibrium price as well.

In contrast, the other options would not lead to both equilibrium price and quantity rising. For instance, a decrease in consumer income would typically reduce demand, leading to a lower equilibrium price and quantity. A decrease in the supply of cotton would reduce the quantity available in the market, which could lead to a higher price but lower quantity. Lastly, a surplus of cotton indicates that supply exceeds demand, which would typically result in a decrease in equilibrium price and potentially a decrease in quantity as producers adjust their output.