17. Another supply and demand puzzleThe market price of calzones in a college town decreased recently, and the students in an economics class are debating the cause of the pricedecrease. Some students suggest that the price decreased because the price of dough, an important ingredient for making calzones, has decreased.Other students attribute the decrease in the price of calzones to a recent decrease in college student enrollment.The first group of students thinks the decrease in the price of calzones is due to the fact that the price of dough, an important ingredient for makingcalzones, has decreased.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.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.OSupplyDemandSupplyDemandQUANTITY (Calzones)PRICE (Dollars per calzone) The second group of students attributes 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.SupplyDemandSupplyDemandQUANTITY (Calzones)Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of calzones. Based on your analysis of theexplanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease inthe price of calzones?O If the price decrease was large, then the supply shift in the market for calzones must have been larger than the demand shift.O If the equilibrium quantity of calzones decreases, then the demand shift in the market for calzones must have been larger than the supplyshift.O Whichever change occurred first must have been the primary cause of the change in the price of calzones.O If the equilibrium quantity of calzones decreases, then the supply shift in the market for calzones must have been larger than the demandshift.PRICE (Dollars per calzone)

Answered: Image /qna-images/answer/bdaefa7f-b96a-4421-ae0b-a372120163ae.jpg

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 the price of dough, an important ingredient for making calzones, has decreased. Other students attribute the decrease in the price of calzones to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of calzones is due to the fact that the price of dough, an important ingredient for making calzones, has decreased.

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 the price of dough, an important ingredient for making calzones, has decreased. Other students attribute the decrease in the price of calzones to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of calzones is due to the fact that the price of dough, an important ingredient for making calzones, has decreased.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 4TY: The following table summarizes information about the market for principles of economics textbooks:...

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Similar questions

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