1. (Short-answer question) There are two types of high-capacity external storage for personal computers, traditional hard drives (HDD) and solid-state drives (SSD). We focus on HDDs in this question. Note that external HDDs come with different capacities from 1TB to 5TB.

1. Bob argues that all HDDs can be treated as the same good and the capacity a consumer buys is treated as quantity. Ann argues that a market can only contain HDDs of a specific capacity. Evaluate their approaches.
2. Due to technological innovations, the cost of producing SSDs drops significantly, while the cost of producing HDDs remains the same. Explain how the supply and demand curves of HDDs (either all of them or 2TB depending on your answer to the previous part) responds to the technological innovation. The markets of HDDs and SSDs are assumed to perfectly competitive. (Limited to 200 words. You may draw a diagram if you want, but you must explain your answer in English.)