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Consider the market for pizza. Suppose that the market demand for pizza is given by the equation Qd=300-20P and the market supply for pizza is given by the equation Qs= 20P-100, where Qd= quantity demanded, Qs= quantity supplied, 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 is suppliers set the price at $15? Explain the market adjustment process.
D: Suppose that the price of hamburgers, a substitute for pizza, doubles. Assume that this leads to a doubling of the demand for pizza (that is 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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