At the beginning of the COVID pandemic in the U.S. in March 2020, many households rushed to stores to purchase large quantities of toilet paper to stockpile.

a) Draw a graph with supply and demand curves to model the toilet paper market in January 2020 (before the pandemic). What happens to the price and quantity of toilet paper when households begin to stockpile in March 2020? Assume for now that there are no shifts in the supply curve. Add a brief explanation of the illustrated dynamics.

b) Now suppose that stores do not want to earn a reputation for "price gouging" during the crisis, so they continue to charge the January price. Illustrate the new situation in the supply-demand graph. Briefly explain what changes relative to a).

c) Are all consumers better off when stores stick to their January prices? Explain. d) How does the equilibrium outcome in a) change if factories that produce other paper goods can switch to making toilet paper on short notice? Now you can assume the supply curve can shift. Illustrate your answer graphically and explain