1. The market for foreign holidays from the UK to Europe is initially in equilibrium with supply equal to demand.Then the corona virus strikes and the UK goes into lockdown with foreign travel banned.What happens immediately to the demand curve? 5 marksWhat happens more gradually to the supply curve? 5 marks2. Imagine the market for Swiss watches is initially in equilibrium when customer tastes for Swiss watches are boosted by an effective advertising campaign.a) Show using a supply and demand diagram how the equilibrium is disturbed and illustrate the initial disequilibrium. 5 marksb) Illustrate and explain the steps by which the market returns to a new equilibrium and show what happens to price and quantity relative to the initial equilibrium 5 marks
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