Problem set
1. Let the quantity demanded and quantity supplied of hotdogs be Qd = 200 - 40 P and Qs=20 + 80 P respectively.
a. Find is the equilibrium price for hotdogs and graph it
b. What are Qd and Qs when a hot dogs costs $5.00. What can be inferred?
c. What happens in the short run if the price of hamburger (a substitute for hot dogs) doubles? Does it affect the price of hotdogs?
2 Referring to the information in table 2.2below, answer the following questions:
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Table 2.2
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Price per
Pizza
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Quantity Demanded
(Pizzas per Month)
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Quantity Supplied
(Pizzas per Month)
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$4
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1,000
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700
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$6
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900
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750
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$8
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800
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800
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$10
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700
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850
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$12
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600
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900
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1. This market will be equilibrium if the price per pizza is
2. If the price per pizza is $10, the price will
a. Remain constant because the market is in equilibrium
b. Increase because there is an excess demand in the market
c. Decrease because there is an excess demand in the market
d. Decrease because there is an excess supply in the market
3. If the price per pizza is $6, there is an excess
a. Demand of 150 pizzas
b. Demand of 50 pizzas
c. Supply of 200 pizzas
d. Supply of 50 pizzas
4. In this market there will be an excess supply of 150 pizzas at a price of
a. $6 b. $8 c. $10 d. $12