Suppose the market demand for pizza is given by Qd = 300 - 20P and the market supply for pizza given by Qs = 20P – 100. 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 of the new market demand for pizza. Find the new equilibrium price and quantity for pizza.
Suppose the market demand for pizza is given by Qd = 300 - 20P and the market supply for pizza given by Qs = 20P – 100. 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 of the new market demand for pizza. Find the new equilibrium price and quantity for pizza.
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
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Suppose the market demand for pizza is given by Qd = 300 - 20P and the market supply for pizza given by Qs = 20P – 100.
- 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 of the new market demand for pizza.
- Find the new
equilibrium price and quantity for pizza. - If the price of Pizza is $2 what is the elasticity of demand and supply for pizza? Now if the price increases to $5 calculate the demand and supply elasticities.
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