Archive for category Pizza Parties and Markets
Pizza Parties, P. 2: Supply, Demand, and Shortages
Posted by The Marginalist in Pizza Parties and Markets on July 6th, 2009
Last time I wrote about what I thought would be the best market arrangement for a high school pizza party. If you recall:
- Students would buy as many pizza slice tickets as they like. The price is exactly equal to the cost, to the teacher, of a slice of pizza (let’s say it’s a dollar).
- The teacher collects the money and orders an amount of pizza exactly equal to the number of tickets bought.
- After the pizza is ordered, if someone bought too few or too little slices of pizza, they could buy or sell their pizza permits on an open market.
I thought I wouldn’t be able to write more about the economics of pizza parties, but it turns out that pizza parties are a great way to think about markets. I have not only this post, but another post on the way about pizza party markets.
Today I want to write a little bit more about the pizza ticket market. Last time I wrote that if too many people over-order tickets, then there’d be a surplus of pizza; if too many people under-order tickets, there’d be a shortage of pizza.
That’s wrong. Here’s why.
(Early) Monday Micro Muse: Mrs. O’Brien’s Pizza Party
Posted by The Marginalist in Microeconomic Muses, Pizza Parties and Markets on June 19th, 2009
[I'm Free!]
TODAY I graduate from Interlake High School in Bellevue, Washington. I am finally free from the public school system!
On Thursday, my English Teacher, Mrs. O’Brien, threw a pizza party for us. Throughout high school, I’ve noticed that pizza parties are notoriously difficult to do. Some people end up eating one slice, and some people will wanna eat half the pizza.
It’s difficult to know exactly how much pizza everyone will want. It’s difficult to know how to charge people. So, when Mrs. O’Brien had boxes upon boxes of pizza and no clear strategy to pay for them, it got me thinking… what’s the best way to have a pizza party?
Ideally, we’re looking for:
- The teacher to be completely reimbursed for the pizza.
- All the pizza to be eaten, but no shortage of pizza (for you econ nerds, we want the pizza to “clear the market.”)
- A fair payment system.
Well, sometimes I wasn’t really paying attention in English (daydreaming about econ), so in return I’ll help Mrs. O’Brien out and prove that economics is actually pretty damn useful. Here are my thoughts on how to run a pizza party….