2. You are the manager of a California winery that makes wines that are considered a substitute for similar wines made in Chile. A disease that attacks the grapes used in their wine has broken out in Chile, reducing the availability of Chilean grapes on average by 20%.

a. Based on this information, what can you expect to happen to the price and quantity sold of Chilean wine?State the determinant(s) of demand or supply that are affected by these events and the direction of movement of the demand curve and/or supply curve.

b. Based on the information, what can you expect to happen to the price and quantity sold of your California winery's wine?State the determinant(s) of demand or supply that are affected by these events and the direction of movement of the demand curve and/or supply curve.

c. Based your analysis in (2a) and (2b), draw supply and demand diagrams to illustrate the impact of these events on the equilibrium price and quantity both Chilean wine and your California winery's wine.State explicitly if either price or quantity cannot be determined as a result of your analysis.