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供求力量有效地配置资源，并试图最大限度地提高买方和卖方的总利益。此外，比萨饼市场表明，消费者和生产者剩余是了解买方和卖方在市场上的福利的重要组成部分，并使用他们来评估自由市场的效率。因此，市场均衡是合理的和公平的，因为当一个市场处于均衡状态时，价格由买方和卖方参与标记决定。一般来说，那些价值高于或低于价格的买家选择购买。同样，那些成本大于或更少，价格选择生产和销售商品的卖家。更甚的是，这些买家是生产者直接影响分配资源的决策决策。
Question 1
a) Market equilibrium price is $11
b) At $11 supply is 12, so the market equilibrium quantity is 12
c) consumer surplus is a triangle which is 1/2(base x height)
1/2(12x (15-11)) =24
d) producer surplus is 1/2(base x height) =1/2(12 x (11-8)) =18
e)total benefit= consumer surplus + producer surplus= 24+18=42
Question 2
So far the pizza marketevaluates question 1 is efficient, because it is correct in identifying the equilibrium which is at a price where the quantity demanded equals to quantity supplied. It forces of supply and demand allocate resources efficiently and try to maximizes the total benefit to buyer and sellers. In addition, pizza market shows consumer and producer surplus are the essential component of understanding the welfare of buyer and seller in market, and use them to evaluate the efficiency of free markets. As a result, market equilibrium is reasonable and equitable because when a markets in equilibrium the price determines by buyer and seller who participating in marker. In general, those buyers who value the good more or less than price choose to buy. Similarly, those sellers whose costs are greater or less and price choose to produce and sell the goods. What is more, those buyers are producers are directly affecting the marking decision which allocates resource efficiently.
Question 3
a)
PED= ((160-150)/ (44-49)) x ((44+49)/160+150))
PED=-0.6
b) if PED value is between 0 and 1, that is inelastic
Question 1.
a) If Health and Cliff are the only buyers in the pizza market and Cathy is the only seller, when the quantity of demand is equal to the quantity of supply, the market is equilibrium. Thus, the market equilibrium price is $11.
b) At the market equilibrium price, that is, when price is $11, the market equilibrium quantity is 12.
c) The consumer surplus is the value to buyers – Amount paid by buyers. In specific, at the market equilibrium, consumer surplus is the area of the triangle above the line of equilibrium price which is 1/2* (12*(15-11))= 24.
d) The product surplus is the amount received by sellers – costs of sellers. In specific, at the market equilibrium, product surplus is the area of the triangle below the line of equilibrium price with is 1/2*(12 * (11-8))= 18.
e) The total benefit to society of this market is equal to consumer surplus + producer surplus, that is, value to buyers –costs of sellers. Thus, the total benefit to society of this market is 24+18= 42.
Question 2.
In the above market, the demand of consumers is efficient, thatis, consumers both have the purchase power and purchase intention on Pizza. Moreover, the supply of sellers is efficient, that is, the sellers both have the selling intention and the selling power. Thus, the quantity of demand of Pizza will affect the price of Pizza, and the supply quantity of Pizza will also affect the price of Pizza. In other words, both the supply and demand determine the price of Pizza.
On the other hand, because it is correct in identifying the equilibrium which is at a price where the quantity demanded equals to quantity supplied. It forces of supply and demand allocate resources efficiently and try to maximizes the total benefit to buyer and sellers. In addition, pizza market shows consumer and producer surplus are the essential component of understanding the welfare of buyer and seller in market, and use them to evaluate the efficiency of free markets. As a result, market equilibrium is reasonable and equitable because when a markets in equilibrium the price determines by buyer and seller who participating in marker.
Question 3.
(a) The quantity demand for tickets decreases form 160 to 150 when the ticket price increase from $44 to $49. The formula of the price elasticity of demand with midpoint method is
Price elasticity of demand = .
Thus, the price elasticity of demand for tickets is ((160-150)/ (44-49)) x ((44+49)/(160+150))= -0.6.
(b) The absolute value of the price elasticity of demand for tickets is 0.6 which is smaller than 1 and bigger than 0. Thus, the price elasticity of demand for tickets lies in 0 and 1. Thus, the demand for tickets is inelastic demand.
(c) Since the demand for tickets is inelastic demand, quantity demanded does not respond strongly to price changes. In specific, when there is sharp rise on the price of tickets, there is less changes on the demand of tickets. Thus, the tickets theatre is the necessity for life of the town. On one hand, people in the town are extremely love the paly of Shakespeare. On the other hand, there is no other theatre in the town. Thus, the theatre market in the town is the monopoly market.
(d) The price elasticity of demand for tickets would not apply to everyone in town. First, not everyone love to go the theater to see the play of Shakespeare. Second, someone in the town have other substitute of theater.
Question 4.
The increasingdemand for oats cause the demand curve for oats to shift to the right. The increase of the oats causes the increase of supply of oats. Even though the price of oats will decrease, the equilibrium price and quantity of oats is larger than the initial value.
Even though oats can help reduce cholesterol has caused people to prefer to eat more oats, there are some substitutes for oats. Thus, if the price of oats increases, the demand of oats will decrease, that is, the demand curve for oats to shift to left. The demand for other markets will shift to right. Thus, the equilibrium price and quantity of other markets will increase.
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