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The U.S. market for avocados is initially in equilibrium. A new scientific study is widely publicized showing that daily avocado consumption significantly reduces the risk of heart disease. At the same time, a severe drought in Mexico, the largest avocado exporter to the U.S., destroys a significant portion of the avocado crop.
Part (a). Draw a correctly labeled supply and demand graph for the U.S. avocado market showing the initial equilibrium price and quantity.