CASE STUDY 2

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

1. Draw the demand and supply curves. Label the equilibrium point as point X.

2. What is the equilibrium price and quantity of paddy?

3. If the actual price in this market were above the equilibrium price, what would drive the market toward the equilibrium?

4. If the actual price in this market were below the equilibrium price, what would drive the market toward the equilibrium?

5. If the market demand for pizzas has increased by 3 pizzas at each price level. Indicate the changes in the graph.

6. If the market supply for pizzas has increased by 3 pizzas at each price level. Illustrate the changes in the graph.