With respects to graph and overall question, Looking for answer to question #2: With no penalty on buyers, if a penalty for breaking the laws is imposed on sellers at more than $5 a disc, the equilibrium price of an illegal disc is_______

Hollywood: Organized Crime Hits the Movies Price (dollars per DVD) The Mexican army seized 1,180 disc burners and 3.14 million copies of movies and TV shows from 23 warehouses in a move to fight piracy that costs Hollywood about $590 million a year Source: Bloomberg Businessweek, April 7, 2011 Assume that the marginal cost of producing a DVD (legal or illegal) is a constant $3 and that legal DVDs bear an additional marginal cost of $5 each in royalty payments to film studios. 1. Suppose the equilibrium quantity of illegal DVDs is 3 million a year Draw the supply curve of illegal DVDs. Label it S Draw the demand curve for llegal DVDs. Label it D Draw a point at the equilibrium price and equilibrium quantity. Label it 1 Draw a curve to show the effect of the events reported in the news clip. Labelit. (Note: CBL is short for Cost of Breaking the Law.) Draw a point at the new equilibrium price and equilibrium quantity. Label it 2 2. With no penalty on buyers, if a penalty for breaking the law is imposed on sellers at more than $5 a disc, the equilibrium price of an illegal disc Quantity (millions of DVDs per year) O A. falls below $3 and the quantity sold decreases O B. rises and the quantity sold increases O C. rises and the quantity sold decreases O D. rises to a price between $3 and S8 and the equilibrium quantity does not change Draw only the objects specified in the question. Price (dollars per DVD)