After several years of decline, the market for handmade acoustic guitars is making a comeback. these guitars are usually made in small workshops employing relatively few highly skilled luthiers. using the three-step process discussed in class, assess the impact on the equilibrium price and quantity of handmade acoustic guitars as a result of each of the following events. explain your answer thoroughly and draw a theoretical model illustrating the changes. treat each case separately.

a. environmentalists succeed in having the use of brazilian rosewood banned in the united states, forcing luthiers to seek out alternative, more costly wood.

b. a foreign producer reengineers the guitar-making process and floods the market with identical guitars.

c. music featuring handmade acoustic guitars makes a comeback as people tire of heavy metal and alternative rock music.

d. the country goes into a deep recession and the income of the average american falls sharply.

the processes are:

step 1. draw a demand and supply model before the economic change took place. to establish the model requires four standard pieces of information: the law of demand, which tells us the slope of the demand curve; the law of supply, which gives us the slope of the supply curve; the shift variables for demand; and the shift variables for supply. from this model, find the initial equilibrium values for price and quantity.

step 2. decide whether the economic change being analyzed affects demand or supply. in other words, does the event refer to something in the list of demand factors or supply factors?

step 3. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram. in other words, does the event increase or decrease the amount consumers want to buy or producers want to sell?