Question

there is a nw machine tha makes pizzas faster and cheaper. wha would happen to equilibrium price and quantity in the market for pizza hut's pizzas

Answer 1

The new machine makes pizza faster and cheaper. Therefore the cost of production will decrease and the efficiency will also increase. Therefore the producer would supply more. Hence the supply of piza hut's pizzas will increase. This will cause a reduction in the equilibrium price and an increase in the equilibrium quantity.

There will be an excess supply at the existing price because of the increase in supply. Price will fall beacuse of excess supply and therefore the quantity demanded will increase.

Hence pizza hut's pizzas equilibrium price will decrease and equilibrium quantity will increase.