A Media Business Correspondent, Mark Sweney, wrote an article in The Guardian on November 14, 2020: Sales of digital books by British publishers are set to hit an all-time high this year as the public turns to reading to escape pandemic cabin fever. However, the ebook and audiobook boom comes at a high cost for the industry, with global sales of printed books by UK publishers plunging by 55m in the first six months of the year as high streets and schools closed during the first coronavirus lockdown. ... The ebook market has also received a boost thanks to the government scrapping the so-called reading tax of 20% VAT charged on digital titles, which Amazon then cut from the price of Kindle ebooks on 1 May, to bring them in line with physical equivalents, which have always been zero-rated. ...

The article discusses two reasons that drove the increase in ebook consumption: (1) reading to escape pandemic cabin fever, and (2) the government scrapping the so-called reading tax of 20% VAT charged on digital titles.

(a) (5 pts) Use an IC-BC model to explain reason #1. Explain in word and show the result graphically.

(b) (5 pts) Use an IC-BC model to explain reason #2. Explain in word and show the result graphically.