1. Market equilibrium with demand and supply functions Consider the market for snow shovels. Suppose the quantity of snow shovels demanded by consumers (Q)") depends on the price of an snow shovel ( P) and the percentage chance of snow (C) forecasted by the local news station. Similarly, the quantity of snow shovels supplied by producers (Q) depends on the price of an snow shovel (P) and the square-yard price of wood (W) used in the production of snow shovels. The numerical formula for the quantity of snow shovels demanded and supplied is as follows: 0" = 6-P+0.20 0" = 8+P-6W Which of the following variables are endogenous in the supply and demand model? (Hint: "Exogenous" variables are those whose values are determined within their models while "exogenous" variables are set outside the models.) Check all that apply. O Chance of snow O Equilibrium quantity of snow shovels O Price of a snow shovel Which of the following formulas correctly states the demand for snow shovels in functional form? O Q" = D(P, C) O P = D (Q , C) O C =D (P,Q")In the following graph, use the blue points (circle symbol) to draw the market demand curve if the weather forecast says the chance of snow is 70%. (Note: Do not convert the percentage to a decimal when plugging this value into the demand curve formula.) Then use the orange points (square symbol) to draw the market supply curve if the current cost of wood is $2 per yard. Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in the market for snow shovels. 20 O Demand 14 12 Supply 10 PRICE (Dollars per snow shovel) .+ Equilibrium 4 10 12 14 16 18 20 QUANTITY (Snow shovels)Suppose the price of wood increases to $3 per yard. On the following graph, show the effects this has on the market for snow shovels by shifting the demand curve, the supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. O Supply Demand Supply PRICE (Dollars per snow shovel) Demand QUANTITY (Snow shovels) This change in the price of wood causes the equilibrium quantity to and the equilibrium price to