The demand for clothing increases. As a result, the price of clothing increases above the minimum average cost of producing it. In the long run, if the clothing industry is perfectly competitive and is a constant-cost industry: the supply of clothing will increase but the price will not.
Businesses can only make money or lose money in a market that is perfectly competitive in the near term. Profits and losses are ultimately eliminated because an endless number of businesses produce uniform, infinitely divisible items.
The supply curve for the industry would be shifted upward by the same amount. The price would rise in the short term, but not by as much as the cost per unit would rise. Economic losses would occur at businesses, eventually leading.
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