Question

The following data represents the weekly supply and demand schedules for “same quality” one-topping large pizzas for delivery in Madison during the summer months.

Price                     Qsup                    Qdem   

14                          10,000                  30,000

16                          15,000                  25,000  

18                          20,000                  20,000

20                          25,000                  16,000

22                          35,000                  13,000

1.            In the space above draw the supply and demand curves.   Label the axes.

2.            What is the equilibrium price __________   in a competitive market?

3.            What is the equilibrium quantity ____________ in a competitive market?           

4.            Calculate the amount of revenue from sales in this market?

5.            The government places a price ceiling of $20.     

a) There will be a shortage in this market

b) There will be a surplus in this market

c) 20,000 pizzas will be sold

d) 25,000 pizzas will be sold

6.            The government places a price floor of $20.     

a) There will be a shortage in this market

b) There will be a surplus in this market

c) 20,000 pizzas will be sold

d) 25,000 pizzas will be sold

Answer 1