The market for pizza has the following demand and supply schedules: Price $4 56789 Quantity Demanded 135 pizzas 104 81 68 53 39 Quantity Supplied 26 pizzas 53 81 98 110 121 a. Graph the demand and supply curves. What are the equilibrium price and quantity in this market? b. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium? c. If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium?

The market for pizza has the following demand and supply schedules: Price $4 56789 Quantity Demanded 135 pizzas 104 81 68 53 39 Quantity Supplied 26 pizzas 53 81 98 110 121 a. Graph the demand and supply curves. What are the equilibrium price and quantity in this market? b. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium? c. If the actual price in this market were below the equilibrium price, what would drive the market toward the 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

The market for pizza has the following demand and
supply schedules:
Price
456789
$4
Quantity Demanded
135 pizzas
104
81
68
53
39
Quantity Supplied
26 pizzas
53
81
98
110
121
a.
Graph the demand and supply curves. What are
the equilibrium price and quantity in this market?
b. If the actual price in this market were above the
equilibrium price, what would drive the market
toward the equilibrium?
■. If the actual price in this market were below the
equilibrium price, what would drive the market
toward the equilibrium?

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Step 1: Defining demand, supply and equilibrium

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Step 2: Plot the demand and supply curves and determing equilibrium point

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Step 3: Restoring equilibrium when price is above the equilibrium price

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Step 4: Restoring equilibrium when price is below the equilibrium price

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