WARKET EQUILIBRIUM $-$

EXERCIS

$*5\mathrm{.}7$ Suppose the market demand for pizza is given by $Q_d=300-20P$ and the market supply for pizza is given by $Q_s=20P-100,$ where $P=$ 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 if suppliers set the price of pizza at $$15?$ Explain the market adjustment process.

d$.$ Suppose the price of hamburgers, a substitute for pizza, doubles. This leads to a doubling of the demand for pizza. $($At each price, consumers demand twice as much pizza as before.$)$ Write the equation for the new market deman for pizza.

e$.$ Find the new equilibrium price and quantity of pizza.