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Please draw a supply and demand diagram for the “Market for Pasta” and answer the following...

Please draw a supply and demand diagram for the “Market for Pasta” and answer the following questions (Label all axes and curves).

a. Assume pasta and red wine are Complements. Furthermore, suppose the price of red wine increases. Illustrate the effect of the price change on the Demand Curve for Pasta.

b. Additionally, there is a (positive) technological improvement in pasta production. Illustrate the effect of the new technology on the Supply Curve for Pasta.

c. How do the changes in demand and supply affect equilibrium price P* and equilibrium quantity Q*? That is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts?

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