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Use four separate supply and demand diagrams to illustrate the effects of the following possible shocks on the equilibrium price and quantity of avocados. In each diagram clearly indicate the initial equilibrium price and quantity and the new equilibrium price and quantity after the shock.
a.) There is a large increase in the price of tomatoes, which is a complement of avocados (you know, because they go together in guacamole).
b.) There are significant reductions in the amount of water that avocado farmers are allowed to use in California, where most U.S. avocados are grown.
c.) A major scientific study shows that people who regularly consume avocados are much less likely to suffer from dementia.
d.) Genetically modified avocado plants that allow for greater output without increasing cost are introduced into the market.
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