Answer
a) The equilibrium price and quantity is six dollars and 81 pizzas.
b) There could be a decrease in the price of inputs or an increase in technology, and those would shift the demand curve to the right. Also, there could be an increase in the number of buyers, an increased income, or increased expectations, which would shift the supply curve to the right.
c) There could be an increase in the price of inputs or a decrease in technology, and those would shift the demand curve to the left. Also, there could be a decrease in the number of buyers, a decreased income, or decreased expectations, which would shift the supply curve to the left.
Work Step by Step
a) Please see the graph. The equilibrium quantity is the quantity where the quantity demanded is the same as the quantity supplied.
b) The excess supply (or shortage of demand) held by the sellers would decrease the price until the price is low enough to attract more buyers (and the price would fall to the market equilibrium).
c) The excess demand (or shortage of supply) from buyers would increase the price until the price is high enough to attract more sellers (and the price would rise to the market equilibrium).
