QUESTION 2: 25 marks. Word Limit: None, but succinct. New South Wales experienced heavy rain falls and ooding which destroyed many food crops. The table sets out the demand and supply schedules for apples before the floods. Price Quantity Quantity (dollars per box) demanded supplied (boxes a week) a. Draw a graph of the market for apples. What are the equilibrium price and quantity? Explain why. [5 marks] If the price of apples was $15 a box. What was the situation in the apples market (shortage or surplus)? Explain how the price and quantity would adjust in response this market situation. [8 marks] Suppose the floods destroyed some apple farms in NSW and the quantity of apples supplied decreased by 500 boxes a week at each price. Explain what would happen to the market supply and demand and the impact on the equilibrium price and quantity of apples, carefully paying attention to the adjustment process. Illustrate the changes on your graph. [12 marks]