SHOW YOUR CALCULATIONS AND GRAPHS. 1. Consider a simple model of demand and supply in the market for Pizza, where the qu

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Show Your Calculations And Graphs 1 Consider A Simple Model Of Demand And Supply In The Market For Pizza Where The Qu 1 (123.94 KiB) Viewed 57 times

SHOW YOUR CALCULATIONS AND GRAPHS. 1. Consider a simple model of demand and supply in the market for Pizza, where the quantity demanded of pizza is a function of its own price, Pp, and income, Y, i.e. Qd = D (Pp, Y), and the quantity supplied is a function of the price of pizza, the wages of the workers, W, and the price of mozzarella cheese PM, so that QS =S (Pp, W, PM). In this model the price of pizza will adjust so that the market reaches equilibrium, that is so that Qd = Qs: Q*, where Q* is the equilibrium quantity. Explain which of the variables in this model are endogenous, which variables are exogenous, and what the purpose of the model is. =