The market price of hamburgers 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 grill allows restaurants to cook a hamburger in half the time. Other students attribute the decrease in the price of hamburgers to a recent decrease in the price of pizza at local pizza parlors. Everyone agrees that the decrease in the price of pizza was caused by a recent decrease in the price of marinara sauce, which is not generally used in making hamburgers. Assume that burger joints and pizza parlors are entirely separate entities?that is, there aren't places that serve both hamburgers and pizza. The first group of students thinks the decrease in the price of hamburgers is due to the fact that a new type of grill allows restaurants to cook a hamburger in half the time.

The market price of hamburgers in a college town decreased recently, and the students in an economic class are days are debating the cause of the price decrease. Some students suggest that the price decreased because a new type of grill a/lows restaurants to cook a hamburger in half the time. Other students attribute the decrease in the price of hamburgers to a recent decrease in the price or pizza at local pizza parlors. Everyone agrees that the decrease in the price of pizza was caused by a recent decrease in the price of marinara sauce, which is not generally used in making hamburgers. Assume that burger joints and pizza parlors are entirely separate entities-that is, there aren't places that serve both hamburgers and pizza.

The first group of students thinks the decrease in the price of hamburgers is due to the fact that a now type or grill allows restaurants to cook a hamburger 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 hamburgers.

The second group of students attributes the decrease in the price of hamburgers to the decrease in the price of pizza at local pizza parlors.

On the following graph, adjust the supply and demand curves to illustrate the second group?s explanation for the decrease in the price of hamburger.

Suppose that both of the causes suggested by the students are partly responsible for the decrease in the price of hamburgers. 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 hamburgers?

1. If the equilibrium quantity of hamburgers increases, then the supply shift in the market for hamburgers must have been larger than the demand shift.
2. If the equilibrium quantity of hamburgers increases, then the demand shift in the market for hamburgers must have been larger than the supply shift.
3. Whichever change occurred first must have been the primary cause of the change in the price of hamburgers.
4. If the price decrease was small, then the supply shift in the market for hamburgers must have been larger than the demand shift.

PRICE (Dollars per hamburger) QUANTITY (Hamburgers) Supply Demand Demand Supply PRICE (Dollars per hamburger) QUANTITY (Hamburgers) Supply Demand Demand Supply