1. Answer the following questions assuming the following two events occur simultaneously in the market for milk.

Event 1: The price of cookies, a complement for milk, goes down.

Event 2: A new device for milking cows is developed allowing farmers to work more efficiently.

a. Describe what will happen to demand or supply as a result of each event.

b. Draw a supply and demand graph that represents the change from just Event 1. What happens to equilibrium price and quantity for just Event 1?

c. Draw a supply and demand graph that represents the change from just Event 2. What happens to equilibrium price and quantity for just Event 2?

d. Since these events are happening simultaneously, now put both changes into one supply and demand graph and analyze the total impact of both events on the market. What is happening in the market to equilibrium price and quantity from both events happening simultaneously?