In a simple model of the supply and demand for pizza, the endogenous variables are:
A) the price of pizza and the price of cheese.
B) aggregate income and the quantity of pizza sold.
C) aggregate income and the price of cheese.
D) the price of pizza and the quantity of pizza sold.

Question

Quizplus · Accepted Answer

The endogenous variables in a simple model of the supply and demand for pizza are the price of pizza and the quantity of pizza sold. These variables are determined within the model itself and are affected by changes in the supply and demand curves for pizza. The price of cheese and aggregate income may be exogenous variables that affect the demand for pizza, but they are not endogenous within the model itself.

In a Simple Model of the Supply and Demand for Pizza