Answer:
a. Illustrate the effect that soaring summer temperatures would have on the market for ice cream.
The demand curve of ice cream would shift to the right because demand would increase. This would raise the price of ice cream, and supplier would now produce more, shifiting the supply curve to the right as well.
b. Illustrate the effect that a decrease in the price of milk (an input to ice cream) would have on the market for ice cream.
Production costs would fall, causing suppliers to produce more, shifting the supply curve to the right. This would decrease the price of ice cream, raising demand.
c. Illustrate the effect that a decreasing number of ice cream shops would have on the market for ice cream.
There are less shops, which means, less suppliers. The supply curve shifts to the left, reducing production and raising the price. As a result of the higher price, demand would fall as well, shifiting the demand curve to the left.
d. Use the line tool to draw a new curve that shows the effect that the release of a report linking ice cream to tongue cancer would have on the market for ice cream.
Both suppliers and consumers would react immediately. Suppliers would produce less, shifiting the supply curve to the left, and consumers would demand less, shifting the demand curve to the left as well. Because of the link to cancer, supply and demand could fall so much as to make ice cream essentially a niche.
