4) Consider the market for pizza, which is in equilibrium. Two events take place simultaneously:
– The price of cheese increases, and
– It is discovered that pizza contains zero net carbs (note: a recent health study advocates reducing daily carbohydrate intake).
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What will happen to the equilibrium quantity and to the equilibrium price in the pizza market?
a) The equilibrium quantity exchanged will rise, and the effect on the equilibrium price is ambiguous
b) The equilibrium quantity exchanged will fall, and the equilibrium price will rise
c) The effect on the equilibrium quantity exchanged is ambiguous, and the effect on the equilibrium price is also ambiguous
d) The effect on the equilibrium quantity exchanged is ambiguous, and the equilibrium price will rise
e) The equilibrium quantity exchanged will rise, and the equilibrium price will rise. Get Economics homework help today
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