Suppose that the market for pizza in a small town is currently in equilibrium with a price of $12 per pizza and a quantity of 100 pizzas sold each week. However, due to an increase in the cost of ingredients, the marginal cost of producing each pizza has increased from $6 to $8. Use the concepts of elasticity and market structure to determine the new equilibrium price and quantity, and calculate the change in total revenue for pizza producers.

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The detailed answer for the above question is provided below Elasticity and Market Structure Analysis To determine the new equilibrium price and quantity of pizzas sold we need to analyze the elastici... View the full answer