Problem 2 The following table shows the behavior of buyers and sellers in a Pizzeria. price per pizza in $ 0.5 1 1.5 2 2.5 3 3.5 quantity requested 280 260 225 170 105 60 35 quantity available 40 135 225 265 290 310 320 a- Draw the demand and supply curves, name the axes. Interpret the shape of the two curves. b- What is the equilibrium price and quantity. c- If the price was initially set at $2, explain how can we return to equilibrium? d- If the price was initially set at $0.5, explain how can we return to equilibrium?

Problem 2 The following table shows the behavior of buyers and sellers in a Pizzeria. price per pizza in $ 0.5 1 1.5 2 2.5 3 3.5 quantity requested 280 260 225 170 105 60 35 quantity available 40 135 225 265 290 310 320 a- Draw the demand and supply curves, name the axes. Interpret the shape of the two curves. b- What is the equilibrium price and quantity. c- If the price was initially set at $2, explain how can we return to equilibrium? d- If the price was initially set at $0.5, explain how can we return to equilibrium?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Problem 2 The following table shows the behavior of
buyers and sellers in a Pizzeria.
price per pizza
in $
0.5
1
1.5
2
2.5
3
3.5
quantity
requested
280
260
225
170
105
60
35
quantity
available
40
135
225
265
290
310
320
a- Draw the demand and supply curves, name the axes.
Interpret the shape of the two curves.
b- What is the equilibrium price and quantity.
c- If the price was initially set at $2, explain how can we
return to equilibrium?
d- If the price was initially set at $0.5, explain how can we
return to equilibrium?

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Step 1: State the information given

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Step 2: a. Draw the demand and supply curves.

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Step 3: b. Determine equilibrium price and quantity

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Step 4: c. Determine what needs to be done to reach equilibrium when the economy is at $2

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Step 5: d. Determine what needs to be done to reach equilibrium when the economy is at $0.5

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