You are to analyze a market for grape juice. You are to compare the new
equilibrium price and quantity of the grape juice to the previous equilibrium
price and quantity after factoring in both factors A and B.
A. If the U.S. Surgeon General announced that increased apple juice
consumption could help prevent heart attacks.
B. There is a drought in California, the most important supplying state for
grapes.
In the process please also explain (1) whether each of the above factors is a
demand or supply factor and how each factor affects price and quantity (4
points), and (2) how both factors together affect the price and quantity
compare to the previous equilibrium.
To get full-credit, please provide a demand and supply diagram to support
your answer.