The Demand and Supply Functions for Pizza in the Local

question 162

Essay

The demand and supply functions for pizza in the local market are: Q_D = 20,000 - 833P and
Q_S = 5,000 + 417P. Calculate consumer and producer surplus in this market. If the minimum wage is increased by $2 per hour, the new market supply curve becomes: Q'_S = 4,000 + 417P. Calculate the loss in consumer and producer surplus in the pizza market due to this change.

---

Definitions:

Rebalancing

The process of realigning the proportions of assets in a portfolio to maintain the original or desired level of asset allocation and risk.

Durations

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often used as an indicator of interest rate risk.

Yield Curve

A graph of yield to maturity as a function of time to maturity.

Immunization

A strategy in fixed-income portfolio management to shield the portfolio's value from interest rate movements.