Assignment: The Market for Pizza has the following demand and supply schedules:
Price Quantity Demanded Quantity Supplied
$4 135 pizzas 26 pizzas
$5 104 pizzas 53 pizzas
$6 81 pizzas 81 pizzas
$7 68 pizzas 98 pizzas
$8 53 pizzas 110 pizzas
$9 39 pizzas 121 pizzas
Questions:
Question 1: Graph the demand and supply curves. What is the equilibrium price and quantity in this market?
Question 2: If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium?
Question 3: If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium?