The market price of cheeseburgers 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 several new burger joints have recently opened in the area. Other students attribute the decrease in the price of cheeseburgers to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of cheeseburgers is due to the fact that several new burger joints have recently opened in the area. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the decrease in the price of cheeseburgers. 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 back to its original position, just drag it a little farther. DemandSupplyPRICE (Dollars per cheeseburger)QUANTITY (Cheeseburgers)Demand Supply The second group of students attributes the decrease in the price of cheeseburgers 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 cheeseburgers. DemandSupplyPRICE (Dollars per cheeseburger)QUANTITY (Cheeseburgers)Demand Supply Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of cheeseburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease in the price of cheeseburgers? If the price decrease was large, then the supply shift in the market for cheeseburgers must have been larger than the demand shift. If the equilibrium quantity of cheeseburgers decreases, then the supply shift in the market for cheeseburgers 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 cheeseburgers. If the equilibrium quantity of cheeseburgers decreases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.

The market price of cheeseburgers 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 several new burger joints have recently opened in the area. Other students attribute the decrease in the price of cheeseburgers to a recent decrease in college student enrollment. The first group of students thinks the decrease in the price of cheeseburgers is due to the fact that several new burger joints have recently opened in the area. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the decrease in the price of cheeseburgers. 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 back to its original position, just drag it a little farther. DemandSupplyPRICE (Dollars per cheeseburger)QUANTITY (Cheeseburgers)Demand Supply The second group of students attributes the decrease in the price of cheeseburgers 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 cheeseburgers. DemandSupplyPRICE (Dollars per cheeseburger)QUANTITY (Cheeseburgers)Demand Supply Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of cheeseburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease in the price of cheeseburgers? If the price decrease was large, then the supply shift in the market for cheeseburgers must have been larger than the demand shift. If the equilibrium quantity of cheeseburgers decreases, then the supply shift in the market for cheeseburgers 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 cheeseburgers. If the equilibrium quantity of cheeseburgers decreases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 2TY

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Another supply and demand puzzle

The first group of students thinks the decrease in the price of cheeseburgers is due to the fact that several new burger joints have recently opened in the area.

On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the decrease in the price of cheeseburgers.

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 back to its original position, just drag it a little farther.

DemandSupplyPRICE (Dollars per cheeseburger)QUANTITY (Cheeseburgers)Demand Supply

The second group of students attributes the decrease in the price of cheeseburgers 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 cheeseburgers.

DemandSupplyPRICE (Dollars per cheeseburger)QUANTITY (Cheeseburgers)Demand Supply

Suppose that both of the events you have just analyzed are partly responsible for the decrease in the price of cheeseburgers. Based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the decrease in the price of cheeseburgers?

If the price decrease was large, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.

If the equilibrium quantity of cheeseburgers decreases, then the supply shift in the market for cheeseburgers 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 cheeseburgers.

If the equilibrium quantity of cheeseburgers decreases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.

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