Chapter 3, Problem 16P

To determine

To use:

A diagram to illustrate how each of the following events affects the equilibrium price and quantity of pizza

1. The price of mozzarella cheese rises.
2. The health hazards of hamburgers are widely publicized.
3. The price of tomato sauce falls.
4. The income of consumers rises, and pizza is an inferior good.
5. Consumers expect the price of pizza to fall next week.

Concept Introduction:

Demand: The demand is defined as the ability to pay for goods and services.

Supply: The supply is the ability of the seller to produce the goods and services and sell it at the prevailing price

Equilibrium price: The equilibrium price is at which the demand and supply are equal