Currently, the market for pizza pies in your neighborhood is at equilibrium. If a large number of people move into the area, we would expect the market price of pizza to:

a) decrease

b) increase

c) remain unchanged

b. Increase

Explanation:

Equilibrium represents that quantity-price pair where the quantity supplied of a particular product is equal to the quantity demanded of that product. Therefore, equilibrium is affected when there is a shift in demand or in supply and once there is a shift in one without a corresponding shift in the other price is affected.

There are four basic laws that guide demand and supply

1. An increase in demand while supply remains unchanged, leads to a higher equilibrium quantity and equilibrium price.

2. A decrease in demand while supply remains unchanged, leads to a lower equilibrium quantity and equilibrium price

3. An increase in supply while demand remains unchanged, leads to lower equilibrium quantity and price

4. A decrease in supply while demand remains unchanged, leads to a higher equilibrium quantity and price.

Looking at the question, once a large number of people moves into the area, it means more people will demand for pizza pies, bringing about an increase in demand, if the neighborhood is unable to supply this quantity due to the sudden increase in population and demand, the equilibrium price and quantity will increase.