Use a supply-demand figure to show the effects of the external shock on equilibrium price and quantity in the short-run. Assume that the markets are perfectly competitive. a. Think about the hot-chocolate industry. Suppose it is winter and there is an energy shortage. Every household is required to set their thermostats to no higher than 65 degrees. What will happen to the price and quantity of hot-chocolate? b. Think about the pencil industry which is currently at a market equilibrium. If, for some reason, both the demand for pencils and the supply of pencils increases what will happen to the equilibrium price and the equilibrium quantity

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