# Question: An Australian researcher has discovered a drug that weakens a

An Australian researcher has discovered a drug that weakens a sheep’s wool fibers just above the sheep’s skin. The drug sharply reduces the cost of shearing (cutting the wool off) sheep because the entire coat pulls off easily in one piece. The world wool market is reasonably close to the model of perfect competition in both the product and factor sides. Trace out all of the effects of the introduction of this new drug.

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