1. The Louisiana crawfish industry catches and sells "mudbugs" from the rivers and bayous near the Gulf of Mexico.

a. Supply and demand curves for this industry are given below. Which is which? How can you tell? Are the curves in- verted? How can you tell? If necessary, invert them. Then plot in a single figure, and solve for equilibrium P, Q.

Q = 1500 - 10P; Q = -1000 + 40P

b. Unfortunately, though 2020 Gulf hurricanes have been mild, they raised costs of supplying crawfish of the same quality, reducing supply by 25%. In addition, consumers worried about possible contamination of the crawfish by pollution from overflowing city drainage systems (despite assurances from the industry and government regulators that the quality has not been affected). Demand fell by 10%. Derive the formulas for the new inverted supply and demand curves. Plot them in a figure that includes the original curves. Note that the slopes of both changed. Do the new slopes (steeper or flatter) make sense to you? What is the economic intuition for the change in slopes?

c. Solve for the market equilibrium P, Q. Have they changed? Once again, doany changes you find make sense in terms of your economic intuition? What changes in our model are exogenous? Endogenous? Explain.

d. The change in crawfish price affected demand for Gulf shrimp. Shrimp are from the ocean and were essentially unaf- fected by the hurricanes. Total shrimp consumption rose 12%. Draw this scenario in a graph, explaining how and why shrimp demand and supply curves might shift.