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1?. Another supply and demand puzzle Suppose the market price of calzones in a university town recentlyr decreased. Economics students studying at the university are
1?. Another supply and demand puzzle Suppose the market price of calzones in a university town recentlyr decreased. Economics students studying at the university are discussing potential causes of the price decrease. One group of students theorize that the price decreased because a new type of pizza oven allows pizza shops to make a calzone in halfthe time. Others claim the decrease in the price of calzones is because of a recent increase in the price of beer. Everyone agrees that the increase in the price of beer I.vas caused by a recent increase in the price of hopsr which are not generally used in making calzones. The rst group of students claim the decrease in the price of calzones can be attributed to the fact that a new type of pizza oven allows pizza shops to make a calzone in half the time. On the folfowing 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 back to its original position, just drag it a little farther. Suppose that both groups of students are on the right track, and each of the events described aboye are partially 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 determine which of the possible causes was the dominant cause of the decrease in the price of calzones? O Whichever change occurred rst must have been the primary cause of the change in the price of calzones. Q If the equilibrium quantity of calzones increases, then the supply shift in the market for calzones must have been larger than the demand shift. 0 If the equilibrium quantity of calzones increases, then the demand shift in the market for calzones must have been larger than the supply shift. 0 If the price decrease was large, then the supply shift in the market for calzones must have been larger than the demand shift
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