8. Another supply and demand puzzle The market price of calzones in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because a new type of pizza oven allows pizza shops to make a calzone in half the time. Other students attribute the decrease in the price of calzones to a recent decrease in college student enrollment. The first group of students think the decrease in the price of calzones is due to the fact that a new type of pizza oven allows pizza shops to make a calzone in half the time. On the following graph, adjust the supply and demand curves to illustrate the first group's explanation for the decrease in the price of calzones. PRICE (Dollars per calzone) QUANTITY (Calzones) Supply Demand Demand 宁夏中磨 -0- Supply The second group of students attribute the decrease in the price of calzones to the decrease in college student enrollment. On the following graph, adjust the supply and demand curves to Illustrate the second group's explanation for the decrease in the price of calzones. PRICE (Dollars per calzone) QUANTITY (Calzones) Supply Demand Demand -0- Supply Suppose that both of the causes suggested by the students are partly responsible for the decrease in the price of calzones. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes is the dominant cause of the decrease In the price of calzones? If the equilibrium quantity of calzones increases, then the demand shift in the market for calzones must have been larger than the supply shift. If the equilibrium quantity of calzones increases, then the supply shift in the market for calzones must have been larger than the demand shift. If the price decrease was small, then the supply shift in the market for calzones must have been larger than the demand shift. Whichever change occurred first must have been the primary cause of the change in the price of calzones. Grade It Now Save & Continue Continue without saving.
8. Another supply and demand puzzle The market price of calzones in a college town decreased recently, and the students in an economics class are debating the cause of the price decrease. Some students suggest that the price decreased because a new type of pizza oven allows pizza shops to make a calzone in half the time. Other students attribute the decrease in the price of calzones to a recent decrease in college student enrollment. The first group of students think the decrease in the price of calzones is due to the fact that a new type of pizza oven allows pizza shops to make a calzone in half the time. On the following graph, adjust the supply and demand curves to illustrate the first group's explanation for the decrease in the price of calzones. PRICE (Dollars per calzone) QUANTITY (Calzones) Supply Demand Demand 宁夏中磨 -0- Supply The second group of students attribute the decrease in the price of calzones to the decrease in college student enrollment. On the following graph, adjust the supply and demand curves to Illustrate the second group's explanation for the decrease in the price of calzones. PRICE (Dollars per calzone) QUANTITY (Calzones) Supply Demand Demand -0- Supply Suppose that both of the causes suggested by the students are partly responsible for the decrease in the price of calzones. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes is the dominant cause of the decrease In the price of calzones? If the equilibrium quantity of calzones increases, then the demand shift in the market for calzones must have been larger than the supply shift. If the equilibrium quantity of calzones increases, then the supply shift in the market for calzones must have been larger than the demand shift. If the price decrease was small, then the supply shift in the market for calzones must have been larger than the demand shift. Whichever change occurred first must have been the primary cause of the change in the price of calzones. Grade It Now Save & Continue Continue without saving.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:8. Another supply and demand puzzle
The market price of calzones in a college town decreased recently, and the students in an economics class are debating the cause of the price
decrease. Some students suggest that the price decreased because a new type of pizza oven allows pizza shops to make a calzone in half the time.
Other students attribute the decrease in the price of calzones to a recent decrease in college student enrollment.
The first group of students think the decrease in the price of calzones is due to the fact that a new type of pizza oven allows pizza shops to make a
calzone in half the time.
On the following graph, adjust the supply and demand curves to illustrate the first group's explanation for the decrease in the price of calzones.
PRICE (Dollars per calzone)
QUANTITY (Calzones)
Supply
Demand
Demand
宁夏中磨
-0-
Supply
The second group of students attribute the decrease in the price of calzones to the decrease in college student enrollment.
On the following graph, adjust the supply and demand curves to Illustrate the second group's explanation for the decrease in the price of calzones.
PRICE (Dollars per calzone)
QUANTITY (Calzones)
Supply
Demand
Demand
-0-
Supply
Suppose that both of the causes suggested by the students are partly responsible for the decrease in the price of calzones. Based on your analysis of
the explanations offered by the two groups of students, how would you figure out which of the possible causes is the dominant cause of the decrease
In the price of calzones?
If the equilibrium quantity of calzones increases, then the demand shift in the market for calzones must have been larger than the supply
shift.
If the equilibrium quantity of calzones increases, then the supply shift in the market for calzones must have been larger than the demand
shift.
If the price decrease was small, then the supply shift in the market for calzones must have been larger than the demand shift.
Whichever change occurred first must have been the primary cause of the change in the price of calzones.
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