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It is safe to conclude that calzones and cheeseburgers are substitutes since both can be used relatively interchangeably as food for lunch or dinner.
It is safe to conclude that calzones and cheeseburgers are substitutes since both can be used relatively interchangeably as food for lunch or dinner. When the price of cheeseburgers decreases, some people substitute cheeseburgers for calzones. This causes the demand for calzones to decrease. Subsequently, the equilibrium price of calzones decreases, and, as a result, the quantity supplied decreases. This is illustrated by a movement along the supply curve rather than a shift in supply itself. Suppose that both of the events you analyzed above 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 was the dominant cause of the decrease in the price of calzones? If the price decrease was large, then the supply shift in the market for calzones must have been larger than the demand 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. Whichever change occurred first must have been the primary cause of the change 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.
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