Final answer:
The increase in the minimum wage to $15 can affect the market for pizza, as it may lead to a decrease in demand. Using the demand equation, we can calculate the quantity of pizza consumers will buy at the new price.
Step-by-step explanation:
The increase in minimum wage to $15 can have an impact on the market for pizza, particularly if it leads to an increase in the number of people following a low carb diet. The price of pizza at Pete's Pizza will increase by $2 due to the minimum wage increase. This will affect the demand for pizza, as consumers may choose to purchase alternatives, such as tacos from Jose's Fiesta, which are cheaper.
Using the demand equation Qd = 16-2P, where P represents the price of pizza, we can calculate the quantity of pizza consumers will buy at the new price of $2. Plugging in $2 for P, we get Qd = 16-2(2) = 16-4 = 12. Therefore, consumers will buy 12 personal pizzas at the new price of $2.
In summary, an increase in the minimum wage to $15 and an increase in the number of people following a low carb diet can lead to a decrease in the demand for pizza at Pete's Pizza, as the price increase may make it less attractive compared to other cheaper alternatives like tacos.