Q2. The Market for Lumber and Housing in the US (E3) [10 marks] There has been a strong increase in global demand for building materials (especially timber) from mid-2020 to 2021, which has led to delays on various construction sites such as in Australia, France, the US. Read the following articles (and links within) and then answer the question below: 1. Sheffey, Ayelet and Libertina Brandt (2021) "Lumber prices are so high that many builders are holding back on construction" Business Insider, March 26, available online: https://www.businessinsider.com.au/why-is-lumber- so-expensive-homebuilding-real-estate-newbuild-inventory-2021-3 2. Lambert, Lance (2021) "Lumber prices are up a staggering 188%-when will the wood shortage end?", Fortune, March 20, available online: https://fortune.com/2021/03/20/lumber-prices-2021-chart-when-will-wood- shortage-end-price-of-lumber-go-down-home-sales-cost-update-march/ 3. Subramanian, Samantha021) "The US wood shortage can be traced to a decades-old beetle infestation in Canada", Quartz, March 18, available online: https://qz.com/1985276/america-is-running-short-of-wood/ Use the demand and supply (D&S) model to demonstrate the change in the market conditions from 2019 to 2021 for the lumber market and the housing market in the US. Use two separate D&S diagrams, and carefully label the curves and clearly indicate all equilibrium prices (and quantities)