Step 2: Identify the side of the market affected by event-Number of Buyers; Parents, concerned that high levels of arsenic will pose long term health problems for their children stopped buying apple juice, which caused the demand for apple juice to change. (D1) Step 3: The direction of change -left or inward). Step 4: Draw new supply and demand graphs and compare initial equilibrium price and quantity with the new equilibrium price and quantity. Since supply stayed the same, but demand decreased, excess supply of apple juice now exists in the market. To get rid of the excess supply sellers of apple juice will have to lower their prices. Result: Quantity sold decreased and price decreased. Complete the next 3 exercises applying the 4 steps and explanation just like in my demonstration in Scenario 1 above. Exercise 1. Scenario 2: Below is part of the response of the FDA to Dr. Oz which the FDA published at its website: ....When the Dr. Oz Show gave the FDA information suggesting that apple juice samples it had tested showed results as high as 36 parts per billion (ppb) of total arsenic, the FDA obtained its own samples of apple juice- including a sample of the same lot of apple juice purportedly containing 36 ppb-for analysis. The FDA's test results do not support the findings of the Dr. Oz Show, and, in fact, are significantly less (2 to 6 ppb) than the levels found by the television program's analysis. Moreover, the vast majority of apple juice samples tested by the FDA over that past 20 years show that apple juice typically contains less than 10 ppb total arsenic. The FDA is committed to protecting the nation's public health through programs such as its toxic elements in food monitoring efforts and by providing consumers with scientifically credible information. Assume that parents and consumers believe the FDA's response. Using the graphing space provided below in figure 2, draw supply and demand graphs to show the effect of FDA's rebuttal on the market for apple juice. Label your graph completely, and in the space below provide a full explanation (10pts)