Question

 The market price of pizzas in a college town decreased recently, and the students in an economics class are debating the cause of the price decre:

 Some students suggest that the price decreased because the price of dough, an important ingredient for making pizzas, has decreased. Other students attribute the decrease in the price of pizzas to a recent increase in the price of beer. Everyone agrees that the increase in the price of be was caused by a recent increase in the price of grain, which is not generally used in making pizzas.

 The first group of students thinks the decrease in the price of pizzas is due to the fact that the price of dough, an important ingredient for making pizzas, has decreased.

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

 The second group of students attributes the decrease in the price of pizzas to the increase in the price of beer.

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

 Suppose that both of the events you have just analyzed are partly responsible for the decrease 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 decrease in the price of pizzas?

•  If the price decrease was large, then the supply shift in the market for pizzas 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 pizzas.

•  If the equilibrium quantity of pizzas increases, then the supply shift in the market for pizzas must have been larger than the demand shift.

•  If the equilibrium quantity of pizzas increases, then the demand shift in the market for pizzas must have been larger than the supply shift.

Answer 1

Option(C) is correct