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 decrease. 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 beer 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.

Answer 1

Answer:

The supply curve will shift rightward

Explanation:

Increase in the supply leads to a rightward shift in the supply curve and ultimately a decrease in the price. Likewise, a decrease in supply leads to a leftward shift in the price curve.  According to the first group, the price of pizza decreased due to the price of dough which means that the supply of pizza will increase and the supply curve will shift rightward.