Suppose the market demand for pizza is given by Qd = 300 — 20P and the market supply for pizza is given by Qs = 20P — 100, where P = price (per pizza).
a. Graph the supply and demand schedules for pizza using $5 through $15 as the value of P.
b. In equilibrium, how many pizzas would be sold and at what price?
c. What would happen if suppliers set the price of pizza at $15? Explain the market adjustment process.
d. Suppose the price of hamburgers, a substitute for pizza, doubles. This leads to a doubling of the demand for pizza. (At each price, consumers demand twice as much pizza as before.) Write the equation for the new market demand for pizza.
e. Find the new equilibrium price and quantity of pizza.
Suppose the market demand for pizza is given by Qd = 300 — 20P and the market supply for pizza is given by Qs = 20P — 100, where P = price (per pizza).
a. Graph the supply and demand schedules for pizza using $5 through $15 as the value of P.
b. In equilibrium, how many pizzas would be sold and at what price?
c. What would happen if suppliers set the price of pizza at $15? Explain the market adjustment process.
d. Suppose the price of hamburgers, a substitute for pizza, doubles. This leads to a doubling of the demand for pizza. (At each price, consumers demand twice as much pizza as before.) Write the equation for the new market demand for pizza.
e. Find the new equilibrium price and quantity of pizza.
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Consider the table below:
Demand and Supply Schedule for Pizza
|
Price ($) |
Quantity Demanded |
Quantity Supplied |
|
14 |
130 |
190 |
|
12 |
140 |
170 |
|
10 |
150 |
150 |
|
8 |
160 |
130 |
|
6 |
170 |
110 |
|
4 |
180 |
90 |
The equilibrium price for pizza is $
and the equilibrium quantity is pizzas. (Enter your responses as whole numbers.) Now, suppose that the demand increases such that the quantity demanded increases by 30 more pizzas at every price. Calculate the new equilibrium price $ and the new equilibrium quantity pizzas
