Homework (Ch 04) Back to Assignment Attempts: 15. Another supply and demand puzz
ID: 1138003 • Letter: H
Question
Homework (Ch 04) Back to Assignment Attempts: 15. Another supply and demand puzzle The market price of hamburgers in a college town increased recently, and the students in an economics dass are debating the cause of the price Average: /4 increase. Some students suggest that the price increased because the price of beef, an important ingredient for making hamburgers, has increesed other students attribute the increase in the price of hamburgers to a recent increase in college student enrollment. The first group of students thinks the increase in the price of hamburgers is due to the fact that the price of beef, an important ingredient for making hamburgers, has increased. On the following graph, adjust the supply and demand curves to Mustrate the first group's explanation for the increase in the price of humburgers Demand Supply O Type here to searchExplanation / Answer
Ans:
1) first group's explanation
The supply curve will shift to the left.
The increase in the price of beef will cause the cost of production of hamburger to increase and this decreases the supply of hamburgers.The decrease in the supply will shift the supply curve to the left.
2) second group's explanation
The demand curve will shift to the right.
The increase in college student enrollment causes the demand of hamburger to increase.The increase in the demand will shift the demand curve to the right.
3) If the equilibrium quantity of hamburger decreases,then the supply shift in the market for hamburgers must have been larger than the demand shift.
If the equilibrium quantity of hamburger decreases then we can consider that supply shift was the dominant cause for increase in price of hamburger.
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