Answer to Question #253593 in Macroeconomics for robot

Question

The market for pizza has the following demand and supply schedules:

price quantity demanded quantity supplied

$4 135 pizzas 26 pizzas

5 104 53

6 81 81

7 68 98

8 53 110

9 39 121

a. Graph the demand and supply curves. What is 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?

Answer 1

a.

As we can see from the graph, the equilibrium price is $6 and the equilibrium quantity is 81 pizzas.

b.

 creating a surplus will make Market price to fall.

c.

creating a shortage will make Market price to rise.