Draw a demand and supply graph for each of the following questions. For each question, start by drawing a correctly labeled graph of the market for cookies in equilibrium. Your starting graphs should each have correctly labeled axes and demand and supply curves. Label the equilibrium price and quantity as p1 and p2 on the axes of each of the starting graphs.

Show the effect on the equilibrium price and quantity in the market for cookies if the price of milk increases. Determine which curve is affected by the change in the price of milk and whether it increases or decreases. On your graph, draw a new curve indicating the shift—either to the right or the left. Label the new equilibrium price and quantity as p2 and q2.

Show the effect on the equilibrium price and quantity in the market for cookies if the price of flour decreases. Determine which curve is affected by the change in the price of flour and whether it increases or decreases. On your graph, draw a new curve indicating the shift—either to the right or the left. Label the new equilibrium price and quantity as p2 and q2.