Suppose that both of the events you have just analyzed are partly responsible for the increase in the price of pizzas. 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 increase in the price of pizzas? Whichever change occurred first must have been the primary cause of the change in the price of pizzas. If the equilibrium quantity of pizzas decreases, then the supply shift in the market for pizzas must have been larger than the demand shift. If the price increase was small, then the supply shift in the market for pizzas must have been larger than the demand shift. If the equilibrium quantity of pizzas decreases, then the demand shift in the market for pizzas must have been larger than the supply shift.

Suppose that both of the events you have just analyzed are partly responsible for the increase in the price of pizzas. 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 increase in the price of pizzas? Whichever change occurred first must have been the primary cause of the change in the price of pizzas. If the equilibrium quantity of pizzas decreases, then the supply shift in the market for pizzas must have been larger than the demand shift. If the price increase was small, then the supply shift in the market for pizzas must have been larger than the demand shift. If the equilibrium quantity of pizzas decreases, then the demand shift in the market for pizzas must have been larger than the supply shift.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter5: Buying The Necessities

Section: Chapter Questions

Problem 3AA

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