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

Price

Quantity demanded

Quantity Supplied

$4

100

25

5

75

50

6

60

60

7

40

90

8

25

100

a.Graph the demand and supply curves.

b.What is equilibrium price and quantity?

c.If the actual price in the market is 5, would this create a surplus or shortage? What is the amount of this surplus/shortage? What shall sellers do in this case?

d.If the actual price in the market is 8, would this create a surplus or shortage? What is the amount of this surplus/shortage? What shall sellers do in this case?

e.If McDonald's made an offer festival (promotion) show the effect on the pizza market.

f.If the price of mozzarella cheese increased, show the effect on pizza market

g.Calculate the price elasticity of demand if the price increased from $5 to $6 using the midpoint formula.

h.How will the price increase affect your total revenue?

i.If the government sets a price floor at $4 will this create a shortage/surplus?

If the government sets a price ceiling at $5, will this create a shortage/surplus?