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Solution

1CTQ. An increase in the input prices owing to rising demand will lead to an increase in price of lithium. As a result of increase in price, the supply of lithium will increase, thereby making the supply curve upward sloping, and making the industry increasing cost industry.

2CTQ. A fall in market demand will shift the demand curve to the left, thereby decreasing the market price and quantity in equilibrium. (Keeping supply constant)